So I'm not so much worried about the bears/shorters think of this stock - I have my convictions on the future of sandalwood and this company s earnings, even if in the short term the shorters are right (not a good look with the chinese thing, they got caught with their pants down). I was prepared to hold this for at least 5 years and ride out this short term volatility. However, this "change of control" transaction has me worried. Frank Wilson has probably had enough of dealing with shareholders/asx/volatility, and hes done all the hard work now of raising capital and building the company (he knows that a good stream of profits from the sandlewood harvests coming in the future which will make him even richer, and he can't exactly liquidate his 13% holdings). He has no reason to rely on equity markets anymore. So he has no incentive to maximize the takeover price for shareholders, as he intends to keep his stake. Therefore, its fairly realistic to assume we could be taken over at around 1.50 - given all the nervous nellys etc posting here it could probably get over the 50% required for a takeover. So whilst I think Frank Wilson has enough "skin in the game" that this is not worth zero/a ponzi scheme, his incentives are not currently aligned with shareholders regarding the takeover control transaction.
Would appreciate if people could comment/critic the above line of thought. I think Frank Wilson was a great MD as he built this excellent monopoly (I know shorters have different opinion) but the above line of thinking has me nervous.
QIN Price at posting:
$1.06 Sentiment: Buy Disclosure: Held
