posrx, page-177

The thing that I am amazed by (so far) is that the POS SP is holding up remarkably well.

There's a very old saying to "listen to the market". More often than not I find it to be somewhat self-serving because it implies than one can divine what (where) the market is saying (heading) if only we can enter some kind of zen-like state of enwhitenment (that old chestnut - lol). But every now and then there's the hint of a whiff of the whisper of understanding, or is that just the wind?...

Let's take a moment to think about the MASSIVE sell-side shock that POS buyers are currently having to withstand and digest in the form of close to 1.4b (billion!) shares that are being offered for sale. Yes, it's an off-market offer that is fully underwritten, but the linkages to the traded market are clear enough. Existing rights holders who have decided to participate and are cold rational thinkers will only be prepared to bid 4.9c on-market right now, knowing that they are guaranteed an off-market purchase allocation later for a fixed 5c. Those entitlement holders who are a little more impatient have bid 5c on-market to just wrap it up. Fair enough, as what's a pip or two between friends? Not being prepared to purchase now that which you know you can purchase elsewhere more cheaply later is not a sign of weakness. Quite the opposite, actually.

So, it's unsurprising that those wishing to sell have been forced to meet the market for 4.9c-5c (after the initial gyrations that were part of the ripples finding their level). What I find very interesting is that, so far (since the BMM T/O possibility has been ruled out), the selling forces have not been strong enough or prepared enough to clamber over themselves to offer their stock to the finite buying pool of buyers to drive the price materially lower. Why is that? After all, there's no guaranteed floor price being bid or an infinitely deep pool of buyers. And the int'l NP is down a further 8% or US$0.49 (i.e. US$6.09-US$5.60) since the RI started (24/08). Why aren't the sellers more committed? Surely they know the buyers are already weakened.

I think the real story here is why the POS has not yet weakened further. And that's a question for the sellers...

Can you hear it? Be still now...