Ann: EdenCrete - US Update-EDE.AX, page-33

The CR at 23c is a nice, convenient place for the SP to go too.

Quite a few people need to adjust there capital gain/loss this time of year, but its usually a case of having to realize a loss to offset a gain. In EDE's case the SP has been going up for so long and so well that a lot of people would be sitting on profits, so they wouldn't be selling this time of year. The only sellers that would realize a capital loss would be those that bought in between mid April and late May.

But the main reason is that EDE has MC of 276 million, without an actual revenue deal. It has maxed out. Its a bubble. Its full potential has been realised and the SP wont go further until actual cash is on the table, ie. included in the calculation.

Now good news doesn't get us another jump. It has reached its peak potential without cash. It is all potential now and frankly this is when things get a little scary. Its buy the rumour and sell the fact if the fact is disappointing or even if quite average.

Long term I believe EDE is fantastic but the next/first major revenue deal had better create at least 10 million in EBIT or the SP will drop.

10 million EBIT times a PE of 30(good future prospects) will get us to where the MC is basically now(all figures nice and round) to keep the nervous investment funds(not us the retailers) in the stock.

If the deal is a step down from those sorts of numbers then SP could drop off, even though Im sure EDE will do those sort of deals and more, much more, in the future. The 'next' deal will either pop this bubble(potential) or keep it inflated. If the deal takes us to a 400MC then up, up and away the SP will go.

I think the bubble / balloon / potential is already in place(all those complaining about it not going up are being greedy), and the next revenue deal is the kicker.

Personally I secretly hope the deal is a little ordinary, the market gets realistic and the SP falls back to its intrinsic value(todays, not 3 years from now) and I pick up more EDE at 15c thereabouts.

Then they sign a second deal which is clearly 'bigger' and its over 40c and going up again.