Remember the old saying: “when Rupert or Kerry are selling, you shouldn’t be buying.”

Well it looks like Fairfax have been afflicted by this as their shares were crunched this morning, losing 16c to $2.87 after touching a four month low of $2.79. The board and management aren’t exactly flavour of the month as the stock is now within striking distance of 10 year lows.

Thankfully, they have completed their fundraising deal, the details of which are here: http://asx.com.au/asx/statistics/AnnDetail.jsp?id=561697&&issuerid=1588The institutions who took up the 110.26 million new shares at $2.77 a pop are only fractionally in the money and Fairfax will now have to discount the offer to retail investors which is designed to pull in another $70 million.

Fairfax now has 845 million shares on issue which are worth $2.42 billion based on the current price of $2.87.

Before the market got wind of the deal last week, Fairfax was trading at $3.15 so the $1.1 billion splurge on New Zealand’s second best newspaper empire has not gone down well.

The company had 735.1 million ordinary shares on issue which were collectively worth $2.31 billion so the bumbling book-keeper and his acquisitive board colleagues have managed to raise $305 million and reduce the value of the company by $110 million in the space of a week. That’s what you call value-adding.