Ann: Halo Food Co Acquires The Healthy Mummy, page-183

I’m sure you guys are across this and I won’t insult your intelligence by stating the obvious, but there are two clear themes driving this down.


1. We still have previous major shareholders that were below 5% that are dumping their shares. It’s fairly obvious they just want out at any price and instead of maximising their price by drip feeding, they’re scorch earthing the SP. Not great for anyone tbh. Just check out the volume - very high vs the last 12 months. Eventually they will run out of bullets but they’re creating carnage and reading some of the posts, some clear angst. From my experience, this will pass but if it’s keeping you up at night it’s time to exit.

2. Clever small investors have been arbing the stupid SPP terms. A 15% discount on the VWAP is very generous. If I’m a small investor with say $10k worth of shares I’d sell on day 1 immediately after the halt resumes. I get my capital but retain my option for 10.5c or the 15% discount of the VWAP - whatever is lower. If the SP goes higher post halt I miss out on some gains but I have my right to buy. If it falls, I buy back cheaper or reallocate capital elsewhere. Given it looks like being an attractive price you’d put up for the full $30k and expect a scale back. Then hold the lot or sell some on market to reduce you’re average price/exposure and boom, you’ve turned the terms favourable for you.

Until shares are issued (Monday), major holders have finished selling and the SPP concludes, trading and volume will be distorted.

Personally I’m looking ahead 6 weeks to the last week in April when the next 4C is out and I have more concrete data.

At the end of the day it’s a battle between sellers and buyers trying to determine an appropriate price for the company. Right now, sentiment is in the toilet and the price is falling but if pro-forma profits are maintained as per announcements or increased via synergies, then there will be significant upside ahead. At this price, the market is pricing in failure. Worth thinking about...