MrMcGee,
It is good that much of the spending is not recurring and *in theory* should increase asset value however most of this spending is a long term return on investment and until the projects are either up and running and proven commercially or sold at fair value they carry some risk - so in the short term why would management be surprised that the SP would be vulnerable to shocks and volatility and struggle to maintain a premium on the ASX bourse? If it is a crazy low SP why arent directors buying?
I like the Linc project portfolio but has the company explained its cashflow model linked to its project pipeline over the next 3 years? Can the project timeline even be modelled with any confidence given the huge number of unknown variables, lack of binding agreements on project construction and numerous timing factors that could delay things? A clear capital plan based on locked in binding deals with clear dates and clear project capital costs would give the market confidence, a great asset portfolio with good potential, unknown cashflow, unknown capital budget, unknown project funding and large doses of uncertainty and risk not so much. Do they not understand this?
I'm glad i hold most of my shares at zero cost thanks to the volatility but I only invest in Australian listed entities - where I have half a chance of understanding the rules. If the listing locale is a priority for management then they have taken their eye off the ball as far as I am concerned. Delivering results gives you market credibility, doing so consistently give you market confidence and these things reflect in SP. It is the reason some companies appear overvalued because they keep on reliably delivering outstanding results (Aussie banks for example). Fear, unncertainty and doubt play a large role in SP being weak. Threatning to take the bat and ball and play somewhere else doesnt make me feel good in regards to management priorities aimed at delivering results.
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