Jamwolf, I agree with you that the current share price must be way lower than the underwriter anticipated (or intended). I suspect that the selling snowballed way beyond their expectations.
Fitnfam, 50% is probably a bit high given that 79% of institutions exercised their rights, and those probably collectively owned at least 50% of the company before the CR. I'm only guessing at what the actual number would be for UBS ownership now... maybe 20% give or take a wide margin for ignorance. You can manipulate a jittery, reactionary market without even trading. Throwing some large sell orders on just above the market will make it look like a panic and force anybody who wants to sell to go in below, adding to the downward pressure. Then you can place some large buy orders and then progressively reduce the quantity to make it look like it's being filled, or cancel them or lower the bid to make it look like support is evaporating. Pretty soon the motion will be self-sustaining and you just have to sit back and watch.
Rmp6868, if UBS can find buyers on the market at 48 cents, I'll be happy to join them on the sell side and take my profit. You could be right about UBS having made a mistake, the damage to shareholder sentiment could be too deep to recover quickly. In that case I've bought myself into a long, long position. It won't hurt them much financially, this whole Arrium thing is pocket money for them, but it could be hard on their reputation if they don't come out of it well. Let's wait and see how things develop over the next 2-3 weeks.
ARI Price at posting:
34.5¢ Sentiment: Hold Disclosure: Held
