lots of sellers why bother, page-7

savvy takeover leverage play today Absolute flurry of pre-market bid/asks this morning, prior to the stock opening at 40 cents. This followed what liked like the stock being run up, late last week, with that huge unfilled 750,000 bid.

I think a sharp trader(s) and likely existing shareholder of CBH shares......using the takeover to leverage a few percent, sure profit. (It was not me). Explains, just maybe, the lumpy early trading and probably the price bid up, last week.

Here is how it would have worked today.

Note the record turnover , in the takeover target TRK today.

1.8 million shares of the remaining 7.5 million that CBH do not already have acceptances for, were sold today. For weeks previously, the daily average turnover was about 20,000. They have no choice buy to convert. (CBH already own 70% of TRK)

Whoever was active buying, probably had made contact with holders of those uncommitted shareholders to set things up today. Anyway whatever, they were keen to offload at $1.45 today. (CBH management would be very keen, just to get more acceptances-regardless of any play on leverage )

The buyer having secured the $1.45 TRK shares can now convert the TRK shares into CBH stock. At todays CBH shareprice close of 38 cents, the CBH offer to TRK works out at close enough to $1.51, per TRK share. Not too bad.....a possible 6 cent premium.(Remember TRK shareholders also get a distribution of Ausmelt shares plus a 1 cent dividend.)

Ausmelt shares are thinly traded and you would be a brave person to think a significant number could ever be sold, at current prices.. A lot of risk for a maybe a 6 cent premium.

What however, if you could sell you CBH shares for 40 cents. (at CBH 40 cents-the premium rises to 13 cents).That is exactly what I think they were up to today.

Typically this sort of activity is undertaken by hedge funds......speculation here in the case of CBH of course, but on a larger scale this type of thing happens all the time.