Ann: Vitaco First Half FY16 Result, page-150

Hi Everyone,

Most of you must have wondered why the SP has dropped so much recently. As a experienced trader, this is my take on it although I do not have any prove.

The main reason is that large shareholders are bailing out. There are many investors who bought heavily since the IPO and the constant slide in the SP was totally unexpected. The big problem for this share is the lack of liquidity i.e big sellers cannot get out at their price without pushing the price down. Hence it's been top heavy since the price broke $2.60.

That's the reason this SP could not go up. The big sellers have to take advantage of any rallies to sell without spooking the market. At good indication of these selling activities happening is when the ASX200 rallies and this SP hardly goes up or even worse goes down. This is a clue that something is really wrong. When big holders dumped their shares, the SP does not follow the fundamentals anymore.

Many anxious would be sellers were hoping that the recent company announcement would push the SP up for them to get out. Unfortunately too many sellers have the same idea and when the SP did not go up, there was a mad rush to sell.

What to do now? It depends on whether you need the money. The selling will only stop when the big shareholders ( could be speculators, institutions etc) finish liquidating their holdings. Until then the pressure is for the price to fall. It is difficult to tell when the big selling will end. Fortunately the fundamentals for this company is still good. If the profits for this company continue to increase, the SP will rebound eventually.