charlie, I'm going to have to disagree with you. I've seen some kind of blame game here with new people to ARV shares, a la me, who bought in on the REE ANN. Sure, it was an error to buy in after a capital raising- absolutely an error. However, I am not the first shareholder to ARV to express concern about recent share trading on ARV. If it is just me concerned, it's my problem; if it is 20 shareholders expressing concern (and the ARV forum seems to me to be a rational group of shareholders), maybe there is something else happening.
Ok, so why do I think there is something else happening- maybe not just a Patersons thing. From this ANN:
- a placement of 54,545,454 shares at A$0.055 (plus a free 1 for 4 attaching listed option (ARVOB exercise price $0.05)) to professional and sophisticated investors raising A$3m, completed on 23 September 2010, and
- a 1 for 6 fully underwritten renounceable rights issue of 46,195,693 shares (plus a free 1 for 4 attaching option (ARVOB exercise price A$0.05)) to shareholders raising A$2.4m. ________________
Firstly, Patersons underwrites placements, refers SI clients to the raising, and gets a fee for doing so. The company of Patersons might not have bought one share themselves- it seems to me they undertake a shortfall. Here's the salient bit though- the placement to SI's was completed on 23rd September. There were good drilling ANN's after that, and the share price spiked to about 8c, and then there was a sell-down (as per placement). Ok, so sophisticated investors probably disappeared at that time, or maybe not just then.
The new rights shares for then existing shareholders commenced trading on the 9th November, as per this ANN:
There was the REE ANN (3/11) and the big sell-down happened. The shares ended at about 7c. Then the rights shares were able to be traded on the 9/11. As far as I reckon, that was the end of the Patersons, SI's and rights issue share profits. The last ANN- good results, according to the people who seem to know- was on the 9/12. The price rose slightly, then fell over the next day to become a negative result.
If Patersons/SI's got their shares on 23rd September, how long do we think that legacy will continue? The people who benefitted from the placement and the rights issue, who didn't sell, are probably stayers. I imagine SI's do several of these deals per year, and proit hugely from doing so, and do a quick in and out.
Now, we're moving forward. If the price falls to 5.5c now, I won;t be seeing it as a Patersons issue- it;s too late for that. Something else will be occurring. Every company on the ASX moves on from placements/SPP's etc. Profit-taking finishes, and the share price moves upwards- *if* the company is doing good things. This is a good company. I think buyers are spookec though- why would you buy today on good news if you can get the share tomorrow more cheaply?
I'd love to stay with this company, because it is doing good things. I hope going forward that that is reflected in the SP. I was going through some old threads on here and saw that when ARVOB's were previously discussed, the ARV SP was at >7c. i hope we start seeing that price again, because I reckon many people feel discouraged. As for me, it's been a learning experience, but I, like everyone else, hope for a slow creep of the share price in an upward manner, due to this company's excellent prospects. I can't help what the seller does, though, and I'll reluctantly sell mself if it seems like there will be constant erosion of my own cash due to a seller or sellers prohibiting a natural share price direction.
Cheers. Let's not turn on each other if the SP keeps falling. I'd prefer it if people who might want to buy ARV can see that we have a big and urgent seller, and to have read about that prior to their decision to buy. I hope we've seen the bottom.
ARV Price at posting:
5.9¢ Sentiment: None Disclosure: Held
(20min delay)