From my market observations, when a large holder wants out and there is no block trade buyer to offload to, the large holder has no choice but to dump it into retail. But this dumping gets done in a controlled manner and goes something along the following lines:
Set a floor price.
Sell down to it.
Pause when buyers get thin.
Buyers build up.
Sell down into it.
When buyers fail to show up after a certain timeframe, then lower floor price.
Rinse and repeat until out at all costs.
The recent floor price appears to be 15c. Every now and then there will be a holder who gets spooked to sell below the floor price. The selling gets paused until the buy side reloads, and then starts again.
Broker data shows the latest round of selling from Ord Minnett (green) started on 20 Oct and retail (orange) have been lapping it up thinking that they are getting a bargain.
But why are Ord Minnett happy to dump at 15c. The answer is simple when looking at a wider timeframe of broker data. Ord Minnett sell average price is ~26c and retail have been lapping it up all the way down whilst thinking they are getting a bargain and the price can't go any lower. Note that this is their current selling average, I've posted previous broker data showing they started this process at ~41c.
This is why I find broker data an important tool for investing. Only once there is evidence of the selling drying up, would I re-evaluate whether to enter or not.
GLTAH
