Ann: EHE Market Update-EHE.AX, page-3

Things go from Bad-to-Worse here for EHE...

I have been maintaining for a while now that they should bite the bullet & do a CR, but they keep doing this peace meal crap which the market will punish...

For those who think only 'the insiders' have gotten out, you're wrong. I've commented many times about their perils (see http://hotcopper.com.au/threads/ann...861994/page-104?post_id=18859326#.V_WFZGcViJC) but people who don't want to hear the truth, just have their head in the sand.

So - what is new here...

Huge EBITDA downgrade (they're now projected to contract YoY)
- What do we know about downgrades... they are rarely a single event, so watch this space - they usually travel in 3's

Cash / Debt Troubles
- They got Kennedy to take $15m of their Div & additional small placement @ DRP price, as opposed to paying cash... Why? The obvious reason is they can't afford to pay it in cash & need the top-up

The reasons for staying away are growing but here is the nutshell
- Hedge Funds doubting the model's effectiveness
- Large number of shorts & climbing
- Upcoming legislative headwinds with largely unknown impacts
- The wider investment community now questioning the accounting practices (specifically the treatment of the RADs)
- Change in business focus from acquisition to organic growth
- Queries about the sustainability of the company's debt limits
- Potential CR overhanging the stock due to potential debt limit breach
- Founder Resigns
- Founder dumps his entire stake at $3.15 (10% then discount) due to it being leveraged
- Negative feedback loop with respect to brokers capping / limiting / withdrawing margin lending on the stock
- Lot of investors now under water due to it being at all-time lows
- Management staying quiet while the SP continues to fall
- Stock making lower highs & lower lows with no clear support on the chart anymore