Ann: Strategic Partnership - MSL & Openpay, page-53

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micador

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13/08/20

08:35

Post #: 46499928
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Originally posted by T.E.P.: ↑

Hi @micador, no problem, happy to provide some perspectives.

Firstly, the initial thesis and the long term investment thesis for MSL is still intact. The stock remains undervalued at these levels and management will continue to execute on the operational and the financial turnaround of MSL over the upcoming quarters.

However, I personally took the opportunity to exit at ~12c (1 bagger) on the day of the OpenPay partnership with the realisation that this had drawn huge attention from traders. Unfortunately, on that day, MSL was the subject of a pump with 13m units traded (significantly above the historical daily average) and traders were caught out when they could not offload MSL stock towards the end of the day.

I have seen this happen more times than I can count (most notably with 1ST Group's OpenPay Partnership announcement) and it almost always ends badly in the short term, causing significant disruption to the share price.

The reason behind this is that many of the 13m units purchased by traders on that day have not yet been fully offloaded and given that this segment does not care for the long term or the fundamentals of this company, they are causing downward pricing pressure on MSL.

Once this is rectified, the stock can continue its march higher. In the interim, you might wish to explore other small cap picks, that have more explosive short term returns.

T.E.P.

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Thank you for your analysis.

I have historically only traded asx 200 stocks, which obviously don't deal with these type of illiquid situations.

Scary stuff when you don't know whats going on, but your explanation makes perfect sense.

Hope to see you back in here one day. Otherwise will catch you on the DW8 forums

MSL Price at posting: 7.3¢ Sentiment: Buy Disclosure: Held
2 Upvote

0 Great analysis

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Ann: Strategic Partnership - MSL & Openpay, page-53

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