Current SP and any other thoughts, page-4333

Fund managers, stakeholders and share price

Shareholders normally hope that fund managers support their counter. Fund managers have their own portfolio and usually have a time frame of 3-5 years. They have their portfolio valued monthly. Sometimes to protect their portfolio, they buy in the market to support their holdings. They have investigated thoroughly before any investment and would sell out if they did not think their investment turned out the way they want it to be. In other words they are answerable to their investors. If their investment grows to a certain size they could be included in the ASX indexation. In this way they will have a ready group of investors.

Are our top holders answerable to any other parties other than themselves? Do they protect their own portfolio, investment or let the market decide? This is a tightly held company and without support from major holders, the share price will be very undervalued. Holders will become disappointed and disinterested and will sell down their holdings and go away. It is a question of opportunity cost. We can see that despite vast improvement in the company itself, increasing reserves, Tier1 global size and quality, the share price has been going backwards. The share is in a down trend and is psychologically not a share to invest in, especially from the technical aspect. Management needs to promote the company so that it becomes attractive to holders. Stakeholders, especially the top 20 will need to protect their investments. It is no use leaving to the market to decide. If that is the case, natural attrition without fresh investors coming in will see the share price drifting to new lows. This will be a trend and unless it is broken as can be seen, the share price will never recover despite lithium share price has gone up substantially and becomes bullish again. The company still lag others in the lithium stakes despite the quality and size of its holding.

I wrote of us commencing mining through a turnkey project. I could also see us being taken over at a very undervalued price. An offer of 50millin looks attractive as it is twice our current market capitalization and difficult to refuse. Hanging on tightly, however an offer of 100million will be difficult to refuse if the previous offer failed, currently 4 times our market capitalization and look impossiblely high. This is low, however without protection of our investments, this company will go off cheap.