neptune acquires 2nd support vessel, page-17

Time for my thoughts on this.

The purchase of the vessel is no doubt necessary for Neptune to continue toward their goal of becoming a fully integrated services company. However, the wording of the announcement was, IMO, not the best. You only have to see the heavy sell orders on the bell yesterday to realise that. People were climbing over each other at the end yesterday to try and get sell orders filled, and they weren't just small numbers either.

The market dynamics of this company suck at the moment. That is not necessarily due to the company itself, but simply the holders on it's register that are intent on exiting the stock to head for what they think is safer ground. As soon as there is a little interest in the stock, there are sell orders coming from everywhere to ensure the SP goes absolutely nowhere.

Now back to the announcement. At the end of the last quarter they had nearly $38m cash. They had already outlaid a significant amount of working capital for the Apache project for which they will receive payment this quarter. They have to pay for the ROV's (only 1 this financial year) and the first vessel, but apart from that, I'm wondering why they would need to raise any money at all to fund the purchase of the vessel. If they did have to raise any funds, I shouldn't think they would need more than $10m at the absolute most. As soon as the announcement was read and hinted at raising funds (which everyone would assume would be a placement) that was enough to send the sellers into overdrive.

And Jimmy, been a long time since I was in touch. Good to see you pop your head up on this thread. As a client of Patersons I receive regular updated research notes on NMS. In the past I have posted snippets on here, but have realised that I am not actually allowed to. However, I can assure you that the purchase of the first vessel is actually LESS than the $8m that was suggested in previous posts on here.