mba shareholding. is this impaired.

Given that JMB has a new director, Tom Kiing, who indirectly holds ~5.4M shares via Sienna (average price of 58c), it seems that JMB is getting back into its acquisitive mode, with the recent acquisition of Oztion and, now, Pluto. But, what of MBA?

Last time I checked, JMB held >15% of MBA. In return for a cash ivestment of ~$3.4M, the current financial (SP) asset value of MBA (based on a 3.5c SP) is ~$900,000. This suggests an upcoming combination impairment loss + actual investment loss (vis a vis the cash price) of >$2.5M.

In the 1/2 year report, investments in listed companies were fair valued at ~$2.7M. If, as was likely, this was entirely accounted for by MBA, then this would have converted at ~20M shares (at 31Dec07).

Even on the basis of that analyis, current fair value on the previously reported shares would now be ~$700,000, thereby implying an underlying impairment loss of ~$2.0M. Add to this the additional share purchases from earlier this year and the overall loss (impairment and cash) increases to $2.5M.

That's arguably 1/2 of last year's reported net profit after tax, and 40% of last year's reported EBIT.

Whilst admittedly, an impairment charge will be treated as a one-off, non-cash charge against profit (so to speak), the question arises as to whether this might need to be flagged to the market.

Other companies, including the likes of ABC and some of the banks have already taken steps to inform the market of various writedowns, impairment charges and the like.

The question here is whether the recurrent trading activity, coupled with the recent acquisition activity will be materially sufficient to overcome any issues associated with impairment against JMB's investment in MBA.