Maybe..maybe not..i always wonder what mr market is worth and i wonder if the smell off bbi will still linger for a while. We are still happy having paid 5 cents each for our holding of Beepa, wished I kept the bunch I sold at 15 cents though. But mostly your transparency and honesty sits well with us as the custodian of some of our money. :-)

You can sell them now if you want to. Because they are trading 'deferred settlement' though, you'd need to do it over the phone (and won't get the proceeds until 4 December).

Whilst I agree with what you have written in regards to the asset valuation aspects, I find the way the opportunity was implemented a little unsettling. Basically BEPPA shares were purchased to make a stag profit. This relied on 1) the recapitalisation being approved, and 2) the new securities listing at a premium. Whilst we now know the securities listed at a discount, a major risk I saw with BEPPA was if the deal would be voted through or not, which based on your comments above is a similar view to your own. With hindsight we now know this was not the case, however if the deal had been voted down it was highly likely BBI would end up in administration which would have seen BEPPA shareholders go through a rather lengthy process to see a return of their capital, if at all. I'm not sure the potential upside of the investment was worth the downside risk, particularly because the fund must have purchased the BEPPA securities in the high 30's? On a related note, when short term strategies go against us we need to be careful of our inherent bias' to turn them into a long-term investment.

I think the major risk that troubles BBIDA is still its high debt level. Great risk implies Great discount, with little information on the web now I'm not surprised to see the stock move against us in the short run. Disclosure: I hold 3% BBIDA atm.

Steve did you manage to read the article on FERC stuffing up the 12/24% regulation on the American pipeline? Greg said he would provide an update but the maths makes sense and sounds like a pretty easy court case (if it even goes that far after they explain that to FERC). The only real unknown as one comment suggested was if NGPL used a linear depreciation model although I doubt that changes much more than a few percentage points here and there (the overall crux that the pipeline is not returning 24% based on a depreciated asset base is still valid).

To me this implies a much greater margin of safety an readjusting gregs valuation of 50-600m to 550-600m for the pipeline makes the valuation change to a low ball of $4.20 (high end above $6). I recently went out on a limb and bought a whole bunch more at $3.60 ish.

my shares under babcock/brown infra fund were listed in the states as bckbf. suddenly a couple weeks ago my 25,000 shares worth 2-4 cents each became One share worth about 3 u.s. dollars! then prime took over and it became Two shares and each was only valued at about $4.00! i had been waiting for each of my 25,000 shares to be repriced under prime at about .40 cents each which was what i'd read would happen. what gives? can anyone explain that to me please?

Hi James,

I'm not sure what the implications are for a US-listed security but the numbers you are talking about in the US are similar to the numbers here is Australia so I'll assume they are the same. BBI had two securities outstanding - ordinary BBI securities and BBI EPS securities (a preference share). Under the recapitalisation, owners of the ordinary securities were paid 4 cents per security in cash and then effectively wiped out. So you should have ended up with a cheque and a couple of almost worthless shares.
I'm not sure where you got the 40 cents per share from? It sounds like you are taking about the BBI EPS - which is what I've been buying. Owners of these securites ended up with 6.2 cents of cash and 35.5 cents worth of new Prime Infrastructure securities (at the issue price of $5.08). Hope this helps.