CXO (ASX) Banter and general comments

Originally posted by Brumbie: ↑

There are many factors at play. This is not unique. The market is a reflection of all of us, an insight into collective souls and minds.
Firstly you have a segment that has been undervalued for a few years and beaten up badly. Many holders are despondent and psychologically weakened. Now I have been guilty of all the following traits and actions at times. You learn. Quickly, hopefully.
First cabs off the rank are those that have lost all hope and sell at a loss. They are out no matter what. Fear of total loss clouds your every waking thought.
Then things turn around inevitably. The price of the product starts bottoming. The SP stops falling as well as starts creeping up. Next cab off the rank are those who get out at roughly break even. Thanking their lucky stars that they dodged a bullet.
Prices then continue to rise. Next cabs are those who get out with a seemingly handsome small profit or 1 or 2 bags. Next stage are when things get hot. Great sentiment, prices rising, always a greater fool to sell your shares to for an even higher price and things go parabolic. Greed has kicked in.
It gets to a stage where prices have gotten so high, that buyers are not there anymore. At the same time due to the extreme profits holders are sitting on. Supply increases. Supply>demand. Price starts falling. Fear starts creeping in again and down she goes at a rate of knots as sellers fall over each other trying to get out. Eventually equilibrium is reached again where more buyers than sellers see value and it stabilises. And we start again.

As far as a CR is concerned. Firstly it dilutes the value of the company. If shares are issued in this case for 15% of the float then every share already in existence is worth 15% less. The market cap should be the same. Now on top of this say in CXO's case where there had been a pump just before and the discount offered is higher than normal there is a compounding effect of disgruntled holders and if they are sitting on profits will lock them in putting downward pressure on the SP. It's like you buying a car for $50,000 today and tomorrow the company floods the market with production and your mates are offered it for $40,000. Not only do you feel ripped off but the car is now only worth $40,000. And also everyone knows it and no one will pay more than that, so any remaining cars pre special will be bid down to $40,000 as well. Who would pay more? Instead of the market defining price in its discovery mechanisms. It has been announced. It is now worth $x by the company.
Anyway good luck and sorry for my babbling on this evening. Good night. Vikings is calling.

Expand

Ah yes, the behavior of the market.

The market is like a woman, some days are magic, you like being there, it behaves, does what you would expect, you make money and hold it and at the end of a good day you kick back with a beer, scotch or whatever and savor the day. Then there are the days where its totally illogical, here, there, everywhere, wild, you make money then lose, pull your hair out and at the end of the day you wonder why you bother. Just like being with a woman my friends.

Like most posts here, just my opinion.

No.	Vol.	Price($)
85	3844280	11.0¢

No.

Vol.

Price($)

3844280

11.0¢

Price($)	Vol.	No.
11.5¢	885371	12

Price($)

Vol.

No.

11.5¢

885371

No.	Vol.	Price($)
84	3744280	0.110
52	7214059	0.105
85	6799288	0.100
11	289645	0.099
8	699918	0.098

No.

Vol.

Price($)

3744280

0.110

7214059

0.105

6799288

0.100

289645

0.099

699918

0.098

Price($)	Vol.	No.
0.115	885371	12
0.120	2591292	19
0.125	1711900	32
0.130	1016028	29
0.135	1480717	20

Price($)

Vol.

No.

0.115

885371

0.120

2591292

0.125

1711900

0.130

1016028

0.135

1480717

(20min delay)
Last 11.0¢		Change -0.010(8.33%)		Mkt cap ! $235.0M

Open	High	Low	Value	Volume
12.0¢	12.0¢	11.0¢	$1.472M	12.86M

Banter and general comments, page-809

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