another one that looks the real deal..., page-37

As posted last Friday...

"For what its worth, I suspect most of the selling more or less ended today...if not, then it is very close. In fact, I would not be surprised to learn on Monday the shortfall has in fact been done and dusted over the weekend...paid for with stock sold this week."

Out by one day...close enough!

Now for the next instalment...it appears people are assuming these shares are going to be "placed"...not necessarily.

Question...

If the 25m shares were sold last week to pay for the underwriting as I suggested they were...then in actual fact those shares no longer exist...except in the hands of those that bought them!

It goes like this...

Sell 25m shares short (covered shorts on this occasion)...and effectively end up with a negative share position of -25m shares (ie, they are short 25m shares)

With the money from short selling the shares, take up the underwriting (ie pay $2.5m)...and then 25m shares are transferred to your account.

End result -25m shares (short)...plus 25m new shares = zero shares balance!

The only overhead now is from those that bought the shorted shares last week...ie, investors/traders (the market).

There are other version of this...

An alternative approach to the above is that existing large holders sell down their positions with the promise to re-load at the lower level...in the end they have what they started with, he Company gets the funds it needs...and the market has an opportunity to load up cheaper than may have been available otherwise.

All good.

Given the limited liquidity in MNE prior to the recent run (my guess 5-10m shares) and assuming about this many (or more) have been net bought and removed from the free float recently...the 25m shares short-sold effectively equals the entire MNE free float now...and my guess is this is probably much less (15m?) due to the nature of recent news and the number of buy-and-hold types that would have entered the stock recently.

This float will quickly reduce in the face of expected news...started yesterday in fact...as more and more people buy and put stock away.

The higher the price rises, we can expect the float to increase as more and more people tip a few shares out...but as long as net buy-and-hold types keep stepping up to the mark, the price will continue to rise.

So far this week the stock is behaving exactly as I suspected (hoped) it would...moving slowly, with little volatility and...fewer swings available for the traders.

Pretty soon though, MNE will push through a critical level (around 13c)...probably coinciding with the market realising their is in fact no obvious overhead...after which a purple patch will possibly ensue where the stock can be expoected to make larger moves with apparent ease.

Could start as early as tomorrow.

Cheers!