analysis of top 20 changes & conclusions

This is an analysis of changes in the top 20 holders of secured notes and changes to top 20 shareholders.

Conversions of secured notes to shares at end of march.

3. NASFUND CONTRIBUTORS SAVINGS & LOAN SOCIETY 1,250,000 1.14 aprox 16.9mil shares
6. DELPHI SYSTEMS PTY LTD 514,280 0.47 >> 6.9mil shrs

No changes to holders of unsecured notes

Top 20 as at 30 April 2010
Rank Name No. %
1. ANZ NOMINEES LIMITED 80,886,339 7.46
2. MR JAMES MICHAEL O'DWYER 57,011,770 5.26
3. NATIONAL NOMINEES LIMITED 51,606,861 4.76
4. MR ANDREW WINSTON DOYLE 37,879,235 3.49
5. TRAVIS REDDY + ELINA REDDY 27,900,794 2.57
6. CITICORP NOMINEES PTY LIMITED 26,508,904 2.45
7. O'DWYER INVESTMENTS PTY LTD 23,687,184 2.19
8. GEM GLOBAL YIELD FUND LIMITED 21,344,056 1.97
9. MRS VIRGINIA WARNECKE 15,028,577 1.39
10. MR GORDON MENZIES WILSON 12,025,695 1.11
11. DELPHI SYSTEMS PTY LTD 8,560,194 0.79
12. MR DAVID JONATHAN GREGORY 7,500,000 0.69
13. MR PETER BICEVSKIS 7,000,000 0.65
14. MR ROBERT WILSON 6,312,767 0.58
15. MR GRAHAM BUGDEN 5,771,570 0.53
16. MR ZORAN ANCEVSKI 5,650,512 0.52
17. MR TIN SHEUNG LAU 5,600,000 0.52
18. PRIMSTON PTY LTD 5,000,000 0.46
19. MR GILBERT GAVARS 4,379,146 0.40
20. MR PAUL JASON MELROSE 4,080,000 0.38
TOTAL 413,733,604 38.17

Top 20 as at 31 march
Rank Name No. %
1. ANZ NOMINEES LIMITED 75,617,006 7.41
2. MR JAMES MICHAEL O'DWYER 57,011,770 5.59
3. NATIONAL NOMINEES LIMITED 51,606,861 5.06
4. MR ANDREW WINSTON DOYLE 45,569,568 4.46
5. TRAVIS REDDY + ELINA REDDY 27,900,794 2.73
6. CITICORP NOMINEES PTY LIMITED 27,528,904 2.70
7. O'DWYER INVESTMENTS PTY LTD 23,687,184 2.32
8. MRS VIRGINIA WARNECKE 15,028,577 1.47
9. HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2 14,704,589 1.44
10. MR GORDON MENZIES WILSON 12,025,695 1.18
11. MR PETER BICEVSKIS 6,000,000 0.59
12. MR ROBERT WILSON 5,912,767 0.58
13. MR ZORAN ANCEVSKI 5,650,512 0.55
14. MR TIN SHEUNG LAU 5,600,000 0.55
15. MR GRAHAM BUGDEN 4,771,570 0.47
16. MR DAVID JONATHAN GREGORY 4,600,000 0.45
17. MR PAUL JASON MELROSE 4,080,000 0.40
18. RECONIA PTY LTD 4,027,062 0.39
19. MR FRANC JOSEPH EVANS 4,000,000 0.39
20. MR GILBERT GAVARS 4,000,000 0.39
TOTAL 399,322,859 39.12

Approximate changes since last month.

ANZ Nominees sold down 5mil
M O'Dwyer UNCHANGED!
National Nominees Unchanged
Andrew Doyle, sold down about 8mil.(Also about 7 mil in March)
Reddy Unchanged
Citicorp sold down 1mil
O'Dwyer Nominees UNCHANGED
GEM Increased holding to 21mil (new issues)
Warnecke Unchanged
G M Wilson Unchanged
Delphi Systems Increased to 8.5mil, prev.not in list
Gregory Increased to 7.5m, prev not in list
Bicevskis increased to 7mil, prev not in list
R Wilson increased 400k
Bugden Increased by 1mil
Ancevski Unchanged
Sheng Lau Unchanged
Primston increased to 5mil, prev not in list
Gavars increased 379k
Melrose Unchanged

Decreases (unknown amounts, now out of top 20 list)
Evans decreased below 4mil
Reconia decreased below 4 mil

What's the analysis here?

1. Long time holders, O'Dwyer, G Wilson holding, Bugden increased, So the old faithfuls are hangin' in there. The much maligned MOD is NOT selling at the current low prices.

2. Most of the sellers eg Andrew Doyle, are recent purchasers and are taking advantage of their low price purchases to sell a few, eg AD bought in at .013. AD was issued 52,669,568 shares at .013, now down to 37mil.

3. GEM in the list for the first time, 21,344,056 shrs issued at .013, still got'em all. At the moment, private investors (Doyle & Reddy) have taken up bigger allocations than GEM.

4. Conversions from notes - 24mil of shares at .01. Delphi converted from notes to shares, about 6.9mil, (previously in secured notes, no longer) but has hung onto them as now in the top 20 (again). Nasfund converted to about 16.9mil shares, but does not appear to have kept them as not in the top 20 (or not that we know about).

5. Quite a few of the shares have been taken up in largish parcels. (Gregory, Bicevskis, Primston)

What can we draw from this?

Doyle has sold down about 15mil, but you would not expect him to have sold below .014 (bought in at .013). His sales would have been when the price was up a bit.
T & E Reddy bought in at .014, still holding even though could have sold at .015 easily. Likely in for the longer term for a much better return as they are held in a superannuation fund.
GEM holding, bought in at .013
NasFund got their converted 17.5mil shares at .01. They would (presumably) be prepared to sell at anything over .01. Seems like most of them have been sold now. Maybe a few left to sell that we can't see in the top 20 list(up to 4 mil?).

.. so it looks like:
Doyle has contributed significantly to downward pressure by selling when the price was >= .014, he may have sold some at .013, but probably not, why would he?
Nasfund selling below anybody else, probably responsible for fall to .012. However, they won't have too many left to sell now at .012/.013 you wouldn't think.

Current downward pressure at .012/.013 may be coming from some Nasfund shares left over, or traders who picked up at .012 selling at .013, or traders/investors who picked up above that and now are pulling out at .012 due to stop losses, plus the odd investor scared into pulling out when the price got down below .013.

What's the prediction? (i.e Guess). Unlikely to be many more available for sale at .012. Traders/sellers selling at .013 will need to be worked through, but they're not likely to have a lot of opportunity to get back in under this. It may take a little bit of time for these to all go, but they will eventually. If there's a good announcement the sp will go up but is likely to be limited by profit takers and possible further sales from recent investors who bought in at .013/.014 There's possibly about 50mil+ shares in this category at the moment. I would think that at least this number of shares need to be traded and held for a significant lasting sp increase to take place. That will need a fantastic announcement or a long time (or both) - but long term, a fair chance of multiplying the current price quite significantly.

Wild card - further deals by the board to investors putting a few hundred thousand in from time to time at further discounted prices. Hopefully there won't be at any worse dilution than what would be the case with GEM.

Downside at todays price .012 - probably very little as long as the board don't run away with giving out better deals than GEM get.

This is all just opinion, but hopefully qualified by some logic.