Here is the last big jump in MSC's share price. The share price went from 0.6 cents to 1.1 cents. Almost a 100% increase in share price!!! Check out the share price just after December 2009.![]()
Why it occurred? Because debentures got redeemed. The final maturity date of these debentures was 30 September 2009. What do you know, MSC hasn't gone into insolvency.
With a massive $10 million order for 2010 what do the debt holders want?
1. Insolvency - Get a few cents in the dollar of loans.
2. Lend them more money till then get positive cash flows in a few months (2010).
I think the obvious answer is #2. According to the annual report "over $11 million in major new sales contracts have recently been signed". You heard right, SIGNED!!!
Next week I expect a similar announcement to be made!
Risk versus return!
DYOR
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Peter Batten, MD
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