A little background..
Shares in Trinity Mirror are a nice example of where investing meets my everyday life. It's not very often, particularly in the sort of (mostly boring!) small cap companies I look at, that something hugely material to the share's performance gets reported on the normal news - by which I mean not the adrenaline fuelled, ticker whirring programming that characterises most 'business' news channels. The most obvious retort to that is that it's not particularly often any of the companies I've invested in are embroiled in huge legal scandals, but there's all sorts of more intriguing elements to Trinity Mirror's alleged involvement in the phone hacking scandal. The storm span up around the first wave of allegations, one point of view goes, was as much about Murdoch as it was about the actual crime that was alleged to be committed.
That might be the case. The portfolio holding shares in Trinity Mirror means I am in the unenviable position of having to come up with an opinion on that, I suppose. That's something I don't particularly like doing - there is a good reason I try to avoid buying in to ongoing legal disputes. Trinity Mirror got in, though, and now there's another factor complicating the valuation of the business. Or is there? Well, not really. I read the discussion boards when interesting events happen because I enjoy seeing how other people interpret the information, and one on ADVFN struck me as nicely summing up my views here:
"Regarding the exciting hacking development: the market dislikes uncertainty. But uncertainty is NOT the same as risk... It is still possible to value TNI, but the RANGE of valuation has widened. There is more uncertainty."
This is not to say the share price fall is unwarranted or illogical, and I'd actually go one step further than the above - the risk to Trinity Mirror was always present and, as many have interjected, obvious. It is simply that the balance of probabilities has changed - it now feels a lot more likely, and a lot more imminent, that Trinity Mirror will start stumping up in legal fees. Something new in the model? I don't think so. To say so is to pretend the risk was never there before.
The more interesting side
As is probably obvious, I don't think I have a lot to contribute to the…
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