village takeover - prefs convert to normal shares, page-9

Hiya,

So whats different about Time Warner, they don't have a p:e of 10 like VRL.

I think VRL has done well with AEO, they sold it off and most likely are re-acquiring it back. AEO is doing relatively well, its not their fault that fund managers want to play daytraders and are not holding stocks. AEO pays a good franked dividend and would beat most term deposits in return at current prices. Its doing well in a tough environment, and it needed to be sold to gain some cash for some of the big movies like matrix which have turned out to be a sound investment looking at the box office returns.

People don't like the strategy of VRL since they changed from primarily cinema into movie making. But potentially it can make a lot of money. Sure they have some failures like Pluto nash, but pluto nash was outsourced to secondary investors and they ended up losing all the money.

They have 50% of the matrix and it seems to be doing slightly well isn't it?

I think my angle is that it isn't that much different to Time Warner which is loosing much more due to AOL.

Secondly, I wouldn't play with VRLPA, they need to be get rid off, everyone knows they will, but without the dividend they are worthless, if you are hoping village will buy them out for a profit it is high speculation.

VRL has a lot of strong assets on the balance sheets, owns the properties in the Queensland theme parks as well now.

There is restrucuring going on, selling off the overseas expansions (which really brought its downfall from $9 or so back down) and they have moved into movie making, just because they are recycling the pool of cash until all the movies are made which makes some anaylsists nervous.

If you are head of a movie making company how much should you get paid $1 million? Have a look what other US CEOs get paid almost $1billion (AU$) (eg Disney's CEO). (Did You Know That... Disney CEO Michael Eisner earned $576US million five years ago, mostly from stock options, which made him the highest-paid executive in all of America in 1998)

Most fund managers probably don't understand what the matrix is, but if profits change it is relatively cheap the stock and could move that's my argument.

Anyway, its my argument, but I see VRL as cheap, sure people have been burnt before but if we liquidate the company at current levels NTA is double so you would make money still, this is not the case in other stories....