taking stock

Well after such a pummelling as the last few days I think it is important to step back and try and take everything in.

The first question I'm asking as I think all would be is - why are Platypus Asset Management offloading what appears to be all of their 10 million shares at the bottom of the market?

It is important to follow the series of events:

1. Platypus acquires their first 5% from 4/7/2012 to 12/2/13 at an average price of $1.19.

2. Platypus acquires a further 1.1 million shares on 13/3/13 (the day that the funding agreement/sell down of Perkoa was announced) at approximately $1 a share.

It is important to analyse when and why they took their stakes. Based on the second purchase you would have to think that their reasoning for a selldown is unrelated to Perkoa and everything to do with Mumbwa. Specifically the resource update/downgrade on 8/4/2013.

It would appear that prior to this final flush beginning last Thursday Platypus had already offloaded something in excess of 400,000 shares. The exact number is impossible to determine but must be between 400,000 and 1,600,000 (sell down to 5.13%) if they have fulfilled their responsibility to submit holder notices.

If the number was closer to 1.6 million it is my belief that they have sold everything they have today.

My guess is a lot of the selling came on 8/4/13 directly after the mineral resource estimate as the way the price tumbled 20% was similar to the last few days.

Now aside from the numbers, im asking myself is Platypus smart money or just big money?

If they were privy to information you would have to question why they were buying at $1.15 average when we have seen two big announcements smash the stock.

The PFS is due in the next month so could their selling be related to this? Given their track record it would be hard to argue that they have any information that the rest of us don't.

Of course the other scenario is far more simple. Platypus are undertaking some sort of rebalancing of their assets given the smashing for small resources in the last 4 months in particular or they have triggered some sort of asset management rule/stop loss.

Since they sold down that initial 400,000 - 1,600,000 they may have been looking for a block trade for the remaining 8.4 - 9.6 million shares. In this market they probably couldn't find anyone to take them.

I note that their website has some good info on their portfolio and reasoning for investment. The sentence below was something I found interesting for their April performance.

"Western Areas is a quality base metal company, but poor sentiment has affected recent performance, triggering one of our capital management rules."

My bet is that they sold their WSA shares on 18 April the day it reached a 5 year - GFC low and saw big volume.

Anyway all just ramblings. On any sensible basis at 20 cents Blackthorn is at ludicrous levels even purely for its zinc and cash.