snap/huss, page-6

Hi BIL...

A little while back I responded to a negative post by challenging the poster to identify any bad decisions made by present Blackthorn management. He didn't, and historically there generally aren't any.

However, since that post and on reflection, I do think the way the recent CR was structured was something I feel management could and should have been handled differently.

OK, the CR was a "success" in that the company quickly and decisively raised 40 big ones..the funding requirements of the company were taken care of. In that sense they were "looking after our interests". However the hidden cost in the method chosen - doing a discount deal behind closed doors - was that it triggered a cascade of profit taking and selling which ultimately sold out the retail investors, hurt sentiment, and I believe is having an ongoing destructive effect on the SP...analogous to a domino-effect.

I think I remember Clarke saying a while back he would like to send some $$$ Blackthorn's way rather than buying the equivalent of his rights on the open market (sorry Clarke if it wasn't you that posted that, but someone said something along those lines)...The point being that I think positive sentiment towards Blackthorn was strong enough to have supported a straight out entitlements offer where everyone could have been on the same playing field (i.e. no special insto deal) I reckon they could have raised 40 mill this way so that everyone holding could have thrown in to the hat on the same terms. Of course it would have required a more aggressive ratio than the 1 for 17 deal, but I think it would have been a goer...I think the market was up for it. I mean the SP was climbing back up just before the CR Ann, punters were feeling good about the company...and then they went and messed it up!

The major damage was done by the insto sell down, and what we have ended up with now is perhaps an element of latent disgust mixed with low volume leakage. And, not helping is the fact that there are some big movers with compelling stories elsewhere on the ASX such as SYR, SIR, KNL, and so on that are very tempting to jump on (as Zach has pointed out).

I don't think anything sinister is going on within Blackthorn, and there are still possible positive catalysts which at any moment could reverse the trend, but I do feel this painful slump could have been avoided.

Market sentiment and the trust of the retail investor sector is an asset I feel is worth looking after when possible, especially when there are options available for raising funds which don't incur the liability of leaving a bitter taste in the mouth's of the retail holders.