BLA (ASX) Ann: Response to Media Speculation

Originally posted by jonk75 ↑

The initial hammering of BLA's SP was due to the Glaucus report, which staked much of its claims on the false hypothetical premIse that if BLA exited the water rights market, its assets would be worthless. Unfortunately for a lot of investors, they didn't think through the implications of what Glaucus claimed & the absurd conclusion that it amounted to, so were duped by their report. The AFR kept reiterating Glaucus's faulty claims via Joe Aston's pityful "journalism," if you can call it that, causing unsophisticated investors to lose even more money fleeing from what was still a decent investment, whose SP was only months ago over $14, as the herd jumped off the cliff taking the SP with it. It is little wonder that the SP has bounced & is recovering, netting significant gains for those wise enough to invest at its lows.

As for the cash burn, it is not entirely surprising during a time during which their SP is being battered (unfairly so), causing them to need to restructure, as well as having to make internal adjustments for the new accounting standards. As such, I think the cash burn is more the effect of their battered SP, not the cause of it - I mean, who was really talking about their cash burn before the Glaucus report? Moreover, the cash burn is due to extraordinary events that are temporary at worst. I can't see it going on for much longer - certainly not after the restructure. And if Oaktree comes through, it'll remove any shreds of remaining doubt.

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Have you read the Glaucus report?????

The price dropped because Glaucus shined a light on the reporting methods of Blue Sky. They were submitting inflated valuations on the assets, this then allowed them to record performance fees (on paper only, never collected) and effectively overstate their profits. Then when people went back and had a look, they realised that Blue Sky have never been profitable - EVER - without those uncollected performance fees.

They then selectively sold down investments to over state their average returns and tried to hide the under performing investments.

Further as I have said previously, if Oaktree get involved, Oaktree will do really well out of the deal, the investors in the funds and BLA shareholders, probably not.

Lastly 30 million dollar negative operating expenses in 6 months, has very little to do with the share price. Maybe 10 million in restructuring costs, at best. This business should be making money, operating costs should be below management fees.

If BLA can get its business model sorted, then its probably worth $3 a share, at best. But thats a big IF, and there is just as much a chance that the business gets suspended from trade and shareholders never see a cent.