Is the negativity justified??, page-151

Yeah this is interesting. The market depth isn't there to support an on market trade. It would literally pump the stock up to new highs. I assumed he slipped up on his language?


This is further supported by the fact that the prospectus states that the shares are issued at the price of 5 day VWAP prior to performance fee calculation. You are correct though that the same dilutative effects would not exist if this is the case as the company would be 'cashing out' selling shareholders. If this was the case I would not have so much of an issue! But I don't think it is.

I also think he made an error because he said it gets 'assessed annually' when the prospectus states it is assessed semi-annually and paid annually.

I think he slipped up on his language.

Thank you Vic_Wattle. Appreciated.

And to answer your question I am not actually short at the moment (although bearish on the stock in the short term and 'paper trading' to test my analysis). It won't be until a performance fee is assessed that I would enter a position and only if the stock remains at these levels (to trigger the relatively large fee compared to incoming revenues).

The irony is that long term holders will actually be better off if the stock falls in the short term. It will lower the stock price performance fee that is yet to be shown was actually driven by underlying asset performance and not prospectus hype.

It is in a strong industry and its prospects are great but its structure dictates it cannot spike like it has done and trigger huge performance fees relative to the ASX unless the underlying assets can actually deliver to offset the effect.