General Discussion AGY, page-23003

I've seen this argument used in many companies when a big brand has some sort of a deal with a small cap on the ASX. The second or third worst company I've ever seen on the ASX made a deal with Lufthansa, comparable to this ATL deal with AGY. The shareholders went crazy saying Lufthansa wouldn't do a deal with a dodgy company, they knew more than any of the shareholders, etc etc... the company went into involuntary administration after about three more (very painful for shareholders) years, and the directors were lucky to avoid jail time for fraud. I could see from a mile away that it was an extraordinarily dodgy company. I've seen countless examples over the years.

I'm not saying AGY is anything like one of the most dodgy companies I've ever seen on the ASX or that the ATL deal is a negative (to be clear, it's a good deal, I said so right after the announcement), but the ATL brand buying a stake is meaningless in terms of indicating anything we can be sure about. As you say, it's a trivial amount of money for them. If AGY never gets anywhere, ATL isn't going to lose face or a meaningful (to them) amount of money. They won't lose it all and whatever they lose will be a tax write off. Heck, if they knew so much and are so smart and did so much research, why would they have bought at 14c right before we saw the price drop to less than half that? I doubt they particularly care, someone probably got a negative mention in a meeting, I have personal friends who oversee larger losses due to stupid moves by colleagues. or themselves in a couple of cases, and it's often quite ridiculous how little due diligence goes in when the amount of money is significant relative to the company or contract involved, let alone when it's trivial money, and this ATL deal is an extreme case.

Again, I'm not saying this is a negative, the ATL deal doesn't indicate anything bad, but it doesn't mean anything particularly good about the company's operations either. The good news is that AGY raised capital at a premium to the share price (and a big premium to the current price, showing ATL didn't really get a good deal, but AGY did).

Let's face it, even if AGY exploded into dust in a year or two it wouldn't register a blip on ATL's reputation, other than AGY holders virtually no one would even know about it.

It makes sense to do your own due diligence, not just choose not to believe your lying eyes and think that someone else's pocket change investment is worth cherry picking in order to avoid seeing the obvious big picture.

I threw a few questions at JZ this week, I hadn't done so for a few months (among the gems in his last response he assured me that my concerns about the company needing external funds were ill-founded and he/the company weren't looking at anything of the sort... this was not long before the ATL CR... and yeah, I did remind him of that in this week's email...). I'm looking forward to his imminent assurance that all is rosy in Salta.