I congratulate you all for holding strong. Interesting day today. Chairman informs market he has sold stock and the price is down >5%.
Henderson and Transocean took up ALL of their 6.5c options. They did this by selling some heads pre expiry date, and rumour has it now, were looking for a buyer of the options pre expiry as they had limited funds to convert. Obviously no buyer was availing and somehow they converted the lot. I suspect this means, they have borrowed the funds for conversion. So whilst this looked very positive for ADO at the time of expiry, it merely represented an investment house making an investment. And as such, the investment would have to be sold- and given an ongoing interest charge would exist, selling would take place sooner than later.
The recent Bangs annoucement was a perfect opportunity for Henderson to offload his excess stock and capitalise on option conversion.
But there seems to be more to this story..
The other director associated with Transocean, also resigned recently. Why?? Transocean came in when ADO was on its knees and underwrote the capital raising in 2009 and up until recently had two board positions. Now one.. soon maybe none. Why.. Henderson's selling may represent not only selling of heads to cover his leveraged investment into ADO but also a dwindling down of his holdings prior to an exit from the board. Remember, they are an investment house and boutique advisory and equities group. Now ADO is finacially de-risked (3 years cashburn in hand), they would add limited value to ADO going forward. If this were to occur, I would welcome it.. I would even suspect that a majority of todays dumping is Henderson. We shall see in time. I would expect him to hold on to as many shares as he can until the next major annoucement that he knows if quite likely to occur within months.
When trying to contact the CEO last week, I was informed that he is overseas this week. No doubt this is to touch base with some of those 55 companies we know ADO is engaged with. I think the "big" announcement we all are waiting for is coming soon...
A.
ADO Price at posting:
7.1¢ Sentiment: Buy Disclosure: Held
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