Sunday, January 18, 2015

MIGHTY RIVER POWER - THE WRECKERS AND THE 'DOG'

Readers will well recall the relentless campaign waged by Labour, the Greens and Winston First against the partial privatisation of Mighty River Power.       The upshot of their campaign was to drive down the issue price thereby denying the taxpayer the benefit of several hundreds of millions of dollars.   Some commentators, less charitable than I, described their campaign as deliberate economic sabotage.   Far be for me to comment on that.

Readers will further recall that less than a year ago on 3 February 2014 MRP shares were being traded at $1.97, fifty three cents below the issue price.   This led to Labour MP Clayton Cosgrove (the man who makes your friendly neighborhood 'Mafiasco' appear Christlike) labeling the shares  a "dog".

Bad news and good news.   For Labour, the Greens, Winston First and Clayton Cosgrove the bad news is that at the close of business on Friday the shares were being traded at $3.23 with investors having already received two dividend payments and those who who bought in at the float shortly to receive their bonus 'loyalty' shares.   The good news is just that.

Some 'dog'.

3 comments:

pdm said...

Cosgrove and the others you refer to are incapable of taking a long term view. Given that any share investment should be long term they are always going to be wrong.

The Veteran said...

pdm ... of course you are right regarding shares being a long term investment.

As for MRP and the market has determined those shares true value to be some 70+ cents greater than their issue price. Clearly the campaign by 'them' drove down the issue price thus depriving government and the taxpayer of several hundreds of millions of dollars.

Many would argue that for 'them' the epithet of 'economic traitors' is well deserved.

pdm said...

Agreed Vet.