I haven't changed my thinking from day one. Very little has come out of the company to justify the pessimism.
Okay, with hindsight guidance was probably a tad bit optimistic. However, nothing 'official' I have heard paints a picture as bad as a $150m company. When deconstruct the company's own value in use calculation - a calculation based on worse case scenario - a $1bn company emerges. Yes that is greater than half what we expected but it is based on worst case scenario and $1bn = $2.50 per share allowing for warrants.
The story, has since last August, grown out of proportion on rumourtrage. Even the troubles with the loan were officially reported by S&G as keeping the syndicate informed and a positive working relationship back in December.
I'm certain history will show the syndicate trouble (debt) was nothing like as desperate as reported and will centre around timing of cash flows and the overly-prudent revaluation of goodwill causing havoc with normal metrics.
SGH Price at posting:
49.0¢ Sentiment: Buy Disclosure: Held
