Forum Archive Index - December 2000

["hugh webber" <hugh.webber@clear.net.nz>]

Yes, thanks for that Ben it was very interesting.
Congratulations to the sharechatter penetrating questions
on China, when will it pay a dividend etc etc.

I had misgivings over a year ago in the midst of the gathering
tech bubble hype that it was a venture capital company and
VC companies do not reward their shareholders.

That seemed to be one of the two major elements missing from
the discussion (a) complete absence of a strategy for rewarding
shareholders apart from one question on when will it pay a dividend
(b) no discussion on the cash flow position.

Some investment sage noted - I forget who it was - that cash flow 
positive companies' shareholders do well and cash flow minus 
shareholders don't do well. The phrase cash burn was mentioned
but is ITC in this situation along with its investments?

A shareholder reward strategy can have a number of elements
such as (i) dividends
             (ii) dividend reinvestment on concessional terms
             (iii imputation credits on those dividends
             (iv) a share buyback scheme
              (v) share options
              (vi) distribution of shares or options in ITC investments
that are doing well
              (vii) distribution of concessional products or services from
the
investments.
              (viii) growth in the value of ITC shares which seems to be a
non-starter here.

There just seemed to be a complete lack of comprehension of what was
possible
or if that there was even an issue or comparison to other companies.

It just seemed to be a one way street of cash in but benefits out to the
companies invested in, and presumably the directors and staff. How long
will investors
put up with that? I would have thought that in the absence of anything else
that
(vi) should be a starter for ITC....


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