"Funds will have rules to stop out"... wasn't meant to be a broad-brush statement. Risk management is a big part of all funds decision criteria, my point is that some have stop loss rules written in to make sure they cut losers whether or not fund analysts are still wedded to their investments. Nobody likes to take losses and excuses for 'over-sold' situations are ubiquitous, but history proves that more money is lost staying with a downtrend or catching a falling knife than playing for an over-sold value bounce. Of course, plenty of funds will have ability to double down and vulture funds specialise in high-risk over-sold gambles so there will always be a market right to the bitter end... if that's where it's heading. I don't think that's where it's heading, but not with any great confidence.
"It could also be that he realised some time ago that the project is not viable for reasons that I do not know (I have little knowledge of this industry) and did not want to be around when the shuite hits the fan and so he first got JP in as CEO and has now resigned so that JP can take the heat from here on."... that's fundamentally illogical and too cynical, even for me lol.
Whether or not Luke wanted to stay or go in August after FP came on as CEO and the CR, he was probably a dead man walking (and fair enough). Luke wouldn't have known by himself whether the project wasn;t viable or not, he was relying on technical advice from multiple others. If others were saying it's a dead duck, share price wouldn;t have held at 18c all August imo. Reckon he believed his own BS and wanted the chance to prove it, but between previous and recent failures, suffered too much reputational damage and had to go. That surreal Diggers presso post CR was a classic case of delusional belief and denial in the face of cognitive dissonance between wanting to believe he had it under control and was winning, verses the reality of losing (think the knight in Monty Python's Holy Grail losing limbs, bleeding out, but insisting they were only flesh wounds, and he was still going to win the fight...).
Maybe it was always the plan to do so, but JP agreeing to take on the MD position now is the key take-away. After two months on site JP should have a good handle on whether Coburn is fatally flawed, 'probably flawed' or saveable... from his own experience but importantly talking with all the stakeholders. JP has no failures or ego to try and cover up (yet...), just get to the bottom of all the problems and review/tweak the recovery plans in place. Why would JP take on the onerous responsibility of MD, set himself up for failure and spend every day on the phone to one holder or another telling them it's going to be fine if he knows it's going to be sheet?
One thing trying to pull Coburn out of the fire as CEO and failing (did my best but it was beyond saving, got paid $500k+ for the effort), quite another accepting an MD role for 6 months stress, reputation damage and certain failure etc. That's not to say JP expects certain success, just makes sense he likes the chance of vesting a swag of PR's issued cheap if he does right the ship and captains it on to success. Share price action and volume on Luke's resignation tells me those in the know are of a similar opinion... no guaranteed success (share price still low) but no certain failure either (price hasn't collapsed beyond the Sep insider sell down).
I'm nervous calling the bottom again for STA, fingers still brown from the first time, but logic says this early October update is the chance for JP and the BOD to come clean on all issues, under management of the outgoing MD, and re-set expectations for recovery under the new one from a low base (hopefully the bottom). Time will tell as always...
GLTAH
STA Price at posting:
11.0¢ Sentiment: None Disclosure: Held
(20min delay)