Business Sunday this week.

[Keg]

Geoff Dixon fronts Sunday this week. This from their email distribution. Just thought some may like to catch it.


Qantas flying high
Geoff Dixon, CEO of Qantas, speaks with Helen McCombie about the airline's rebound from the lower profit of a year ago to the very solid second figures in the wake of September 11 and the collapse of Ansett. Mr Dixon will also be questioned on the $800 million capital raising, the competition with Virgin Blue and relations with Sydney airport.

[skychaser]

Perhaps Dixon should also be asked why QANTAS put the value of shares at the price of $4.20 when they were at the time, and had been for a while, in the $4.60-$4.70 price range. So when the new shares were issued to institutions, and then retail buyers, the price of the existing shares plummeted some 26cents. Was this a deliberate ploy to undervalue the shares so that more instution buyers would subscribe or is the book value of the company in line with shares worth $4.20 each? Yes, I got caught believing the shares should rise with the annual report and thinking that the value of the new shares would be somewhere in line with the existing shares. They could rise again on Monday. There again, they could stay down for quite a while. Interesting when you think that in the annual report every employee is not only getting a monetory bonus but also a bonus of a $1000 worth of shares.

[3 Holer]

Perhaps Dixon should also be asked why QANTAS put the value of shares at the price of $4.20

The institution does not (market) value it's shares, the market determines the share price. The market didn't react kindly to Qantas borrowing $600 million but that's OK because next week the market may consider it a good decision. QAN shares will go through the $5 barrier and Dixon will secure another couple of million dollars in his end of year bonus!

I believe QAN is a good buy at the moment and if you are in for the long haul (no pun intended) they will realise their full potential over the next 12 months.

[Columbia]

It is a normal situation for the share price to drop after a placement like this. If one additional share is issued for each eight existing shares, earnings per share has been diluted by the extra shares on issue. Therefore it is logical that the share price will fall. No rocket science, just logic. Current shareholders can pick up their one for eight at $4.20 (a discount to fridays close) free of comission & GST, stag if they wish or hold for the long term.