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Ann: CLA Signs Non-Binding Term Sheet and Subscription Agreement, page-218

  1. 998 Posts.
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    I've been hinting previously that it's possible that SVM could be using their new shares to suppress the SP, to make the deal look more attractive.

    However, something doesn't add up. At 15% holding, they would well and truly be a significant holder. How could they then sell their shares to suppress the SP without having to make announcements?

    I'm not saying that I'm sure that they aren't doing this, I just need to be able to answer this question to get rid of all the question marks.

    I tried to think of a dodgy way to do it. Say you managed to get a big chunk of cheap shares, in this case, 1.5c. At that price, you would be up with a profit on paper. Now if you start buying high and selling low (using a proxy?), the losses from that trading would be offset by the profit already locked into the 1.5c shares.

    Based on this theory, with the opening price on Tuesday being 2.5c, in order to ensure that the "profits" from the 1.5c shares match the losses from the suppression trading, they would have to stop the activity at exactly 2c, the mid point from the open to 1.5c.

    What do you think about this theory?
    If this doesn't hold water, how else could SVM be responsible for SP suppression?
 
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