Optimism upon optimism, strider! Clearly, if it was there, the carbon tax was going a big part of AEB's income (whether or not it was going to exceed costs). Whether or not it was being spoken about it was an important part of the picture.
Before this deal people weren't talking about the carbon tax as much. Actually, they weren't talking about anything much, the AEB area was pretty quiet. No one was talking much about having a site for the operation either - did that mean it wasn't relevant? Well, actually, you'd think so given the (brief) rally after obvious news was announced.
Europe is going to be a tough market to enter. Let's say the technology is commercially viable. Do you think a microcap like AEB which didn't even manage to raise one million dollars in its big capital raising is going to be able to compete with all the oil giants like BP in Europe? Who are the European coal-fired power stations going to go with? Some cash-strapped Australian or a safe, heavily-funded company?
Even if AEB somehow beats the odds and cracks into the European scene, it's going to be years down the track from now. The market doesn't price in hypothetical future profits that far ahead very heavily, yet AEB already has big success priced in.
I'd rather buy at 2c and sell at 5c when the Europe deal is announced in a few years rather than buy now at 20c, watch the slow drop in price while waiting for the opportunity to watch my 1c shares to jump to 5c. But hey, if sentiment and optimism alone hold the price above 20c from here on, well done! :)
Add to My Watchlist
What is My Watchlist?