Well, it did not turn out as expected. If anyone wants proof that the market is irrational then look no further than here.
Let me make a list of recent events that affected the fundamentals of this company, and its SP: (note – the SPs quoted here are taken from a simple closing price chart –the intraday prices would be both higher and lower)
| date | event | SP | notes | shorts |
|---|
| 1 | 18/1/2004 | TH & Binding agreement with CRH | 2.7c | All through 2003 had been declining from about 4c (apart from a few spikes) then started ramping up from 1.8c in November 23 | 9.7 mill |
|---|
| 2 | 22/1/2004 | Placement completed – 466 mill shares at 2.7c | 2.9c | Then dropped to below 2c in a few days | 15.9 |
|---|
| 3 | 21/2/2004 | FAT completed | 2.2c | Then short-lived spike to 2.7c, then dropped to 2.1c, then hovers around 2.5c until July | 11.4 |
|---|
| 4 | 17/5/2004 | Hadrian departs for Florida | 2.5c |
| 9.7 |
|---|
| 5 | 8/7/2004 | Hadrian arrives in Florida | 4.1c | Some on HC deduce which boat Hadrian is on, and SP ramps up from 2.4c on 1 July to the 4.1c today. Then it peaks at 5.8c on 15 July | 8.7 |
|---|
| 6 | 1/8/2004 | TH | 4.8c |
| 17.6 |
|---|
| 7 | 5/8/2004 | Placement completed – 329 mill shares at 3.8c | 3.9c | Then momentarily dips to 3.4 | 46.5 |
|---|
| 8 | 14/8/2004 | SAT completed | 3.9c | Opens at 4.2c from 3.7c, momentarily spikes at 4.5 and falls to 3.9c. There were nearly 20 mill new shorts, but don’t know how many closed so won’t know the position for 4 more days. | ? |
|---|
The binding agreement on 18/1 was the first event of substance for FBR. Here is a real contract (withconditions) to sell many machines. So, what happened? Nothing. Ho hum. The market ignored it.
The nextbig event, the FAT, created a bit of excitement for a few days, but thenreverted back to the doldrums for a few months. Weird – we meet the first condition of the contract but nobody cares.
So,these two events which put FBR on the path to make real money were ignored bythe market.
Then Hadrian sailed off to Florida. Of course everybody knew that it was going to happen, though we did not know when. But when it happened, nobody cared much about it, until it was about to arrive in Florida.
Someone worked out on which ship it was on and, sure enough, from a few days before its arrival the SP started climbing. Fair enough – the excitement was getting palpable, even though everybody knew that it was bound to arrive unless the boat was lost. The excitement continued for a few days: from memory I think the intraday SP reached 6.2c, but it wore off as we were all hanging out for the SAT, and we retraced to 4.8c.
Again weird – the market cared more about the Hadrian travelling rather than on what it can do.And then BOOM. FBR did a CR at 3.8c. Upset manypeople, but the LTHs bit their lip and cursed under their tongue, as we allknew FBR was strapped for cash. Bah. Had to be done. SP stayed fairly steady,dipped a bit to 3.4, but then got back to 3.7 before the big announcement – passed the SAT. Wouldn’t say it waswith flying colours, but no matter, it passed, that’s what counts. And for acouple of hours there was a lot of excitement – so much so that I nearly posteda happy note about the fat lady having sung – I was going to swap her for a fatman, Calaf, who had not slept all night because in the morning he would havehis head cut off unless he could do something right – well, he was veryconfident that he could do it, and the last three words he sang, in Italian ofcourse, were Vincerò. In probablyone of the best arias ever.But it didn’thappen – not that we got our head cut off, even though FBR did the right thing.After a brief moment at 4.5c (where some clever trader managed to sell about500 bucks’ worth – on ASX - maybe a bit more elsewhere) we fell back to 3.9c: not a big win on yesterday – not going to sing about that. Again, weird – FBR meets the secondcondition of the contract, and the market basically ignores it.
So, there – FBR does 3 things directly related to a contract for making money and nobody cares. It seems bobbing on the sea is more important.
Meanwhile, though, some funny stuff was happening on the sidelines.
1: from Nov 23 until the agreement with CRH, why did the SP increase by 50%? Who knew what?
2: the volume of daily transactions was about 5 mill. But then started ramping up just before the SAT. Why? Who knew what?
3: On 5 Aug the shorts shot up by 30 mill (which explains the dip in SP). Very unusual – was the SAT already done, the video shot, and the imperfections already known to the trader?
There is more – but I am tired now. I still think Vincerò is likely, but don’t know when.
GLTH and DYOR.
ps damn - HT often drops spaces between words - cant fix them all as I run out of the 3 minutes.
(20min delay)