The Livable Blog

Making our communities better places to live and grow.

Macquarie Creates Stock Market Quandry - Negative Value Stocks

03/31/09

10:14:04 pm, by edoherty

, 291 words

Categories: Gateway, Port Mann Twinning, P3's

Macquarie Creates Stock Market Quandry - Negative Value Stocks

The Australian investment bank Macquarie has just created a new problem for stock exchanges; how do you trade stocks with a negative value? The Brisconnections scheme they promoted is now apparently worth -$0.67 per share. The problem is that stock exchanges don't know how to exchange stocks with a negative value.

Just as a reminder, Macquarie failed to come up with financing for the Port Mann / Highway 1 freeway expansion. And was therefore rewarded with a juicy no-bid contract to collect the tolls (instead of being made to pay a penalty for non-completion) just as their corporate partners were awarded no-bid construction contracts.

Why is it that irresponsible corporate behavior is being rewarded rather than punished? It is not just AIG in the US, we too are paying bonuses and giving sweetheart contracts to people who should be behind bars.

Bang on the ASX door - it does have a role in instalment mess
Elizabeth Knight
April 1, 2009

[snip]

When BrisConnections was floated, its shares were sold at a price of $3 - $1 down and the remainder to be paid in two $1 instalments.

BrisConnections has a value, but the first instalment is less than worthless - it's negative.

The trouble arises because the total value of this company is only about $1.33 per share - less than half of the $3 issue price.

The company's share price on the stock exchange is 0.1c - and there is a $2 liability attached to it. So its hardly surprising that anyone owning the stock does not want to pay the second and third instalments.

In theory, if an investor wanted to get rid of the potential liability he would need to pay the buyer 67c.
[snip]
full text at http://business.smh.com.au/business/bang-on-the-asx-door--it-does-have-a-role-in-instalment-mess-20090331-9ibx.html

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The Livable Blog

Our goal as the Livable Region Coalition (LRC) is to provide a voice for those who believe that efficient and sustainable transportation is a cornerstone for the future of the Lower Mainland. We believe that through creating attractive transportation choices, encouraging urban density, and preserving green space and agricultural land, we can make our communities better places to live and grow.

We believe that the provincial government's strategy to pursue excessive development through the Gateway project is detrimental to the well-being of Greater Vancouver. The Gateway project's stated goals of reducing pollution and congestion will not materialize. Evidence for this comes from many sources. Instead, we advocate real solutions that will actually work and will be less expensive.