The rise and rise of Andrew Forrest’s wealth is nothing short of extraordinary. After cracking the magical $10 billion mark on Monday, the value of Twiggy’s 102.3 million Fortescue Metals shares stacked on $706 million to $10.83 billion yesterday when the stock rocketed 69c or 7% to $10.59.
BRW has already gone into print for the embargoed copies of the 2008 Rich List which are being circulated today, but this is how the magazine charted Twiggy’s rise over the past four years:
- 2005: $340 million
- 2006: $810m and 29th
- 2007: $3.89 billion and 5th
- 2008: to come
While it is great that one colourful bloke has snaffled an $11 billion fortune by opening up the Pilbara, the most extraordinary aspect of Fortescue’s rise has been the way Australian institutions continue to shun the stock.
With production and shipments now underway, Fortescue has surged into the top 10 this week with a market capitalisation of almost $30 billion. It is bigger than Wesfarmers and QBE Insurance and almost twice as valuable as Macquarie Group.
The $5 billion Australian Foundation Investment Company is the nation’s biggest listed investment fund. It is chaired by JB Were stockbroking doyen Bruce Teele and has BHP-Billiton chairman Don Argus on its board.
I gave the board this spray spray at last year’s AFIC AGM for failing to back Fortescue when the stock was still below $5. It has doubled since then and still they won’t touch it. Clearly Don Argus doesn’t believe BHP’s rhetoric on longer for stronger based on AFIC’s investment decisions.
The Herald Sun reported today that Twiggy has become “Australia’s first $10 billion man”. Um, not really, Rupert Murdoch’s Australian-registered stake in the then Australian-based News Corporation topped $15 billion at the height of the dotcom bubble.
Whilst Twiggy’s personal wealth is incredible, there are three other substantial shareholders, all foreign, who are also making out like bandits.
This is what New York-based Leucadia National Corporation said about Fortescue in its latest quarterly result:
Non-current available for sale investments include 277,986,000 common shares of Fortescue
Metals Group representing approximately 9.9% of the outstanding Fortescue common stock. The Fortescue shares have a cost of $US246,300,000 and market value of $US1,824 billion at December 31, 2007.
These guys paid US88c a share and based on yesterday’s close the stake is now worth $US2.82 billion and the profit comes in at $US2.57 billion.
Perpetual is Australia’s biggest independent equity fund manager, which used to claim it was the world’s most profitable. Alas, the stock has almost halved over the past year and we got another profit warning yesterday that reduced its market capitalisation to $2.1 billion.
If Perpetual rather than Leucadia had backed Fortescue, Perpetual shares would be back up near $100 because funds management is a winner take all industry.
Check out the expanding Mayne Report Rich List.
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