shorting - tools of the takeover trade, page-16

Hi Klem,

The whole CSG sector has been hit

BOW and ESG are both trading at about 63% of their 52wk share price highs

If you look at Market Cap for quoted shares then BOW is now trading at about 78% of its 52wk High Mkt Cap while ESG is at 63%. ESG has been marked down much more than BOW. This is probably because BOW is not in NSW. It has QLD CSG policy governance stability and also close to Gladstone.

I think what you are posing is :

When will ESG and the sector stabilise , stop falling and consolidate ?

I am looking for ESG to start to move horizontally for a few weeks which is the bottoming process . This could be around 0.60 +-0.02 . Every successive week from 28/4/11 on it has been going Down - Relentless.

The "funny" thing is that I first bought into ESG as a less volatile speculative haven from the smaller O&G stocks that I usually put money into. A Lesson is that once the Market Cap gets into the above $100M mark the big players who buy in expect much much more and when there are too many promises and not enough delivery the stock gets sold off. Having a "Large" market cap is for management to maintain by delivery on conversion of MOUS to GSAs and other promises made.

BOW has Instos holding 28% and Retail 50%, (Employees + Private stakeolders) 20% , Corporate stakeholders 2% (Presn 16/6/11)

What are the comparative figures for ESG ? I cant recall ever seeing a similar piechart. With STO holding 20.97% as a long term investment you would think that would have put a brake on any sell off. Also BOW without a large holder like STO with high effective control, would be more of a credible takeover target so probably gained on ESG in the "magnitude of fall" stakes.

The winds affecting us are beyond our control :-

- USA , no one seems to believe in any recovery just money printing stagnation
- Japan , damage from tsunami earthquake $253Bn at least so that connection ESG has seems fraught. More stagnation.
- China , so many anecdotes about ghost cities and other early built infrastructure that you have to wonder when inflation reality will catch up. Can China keep spending its savings buying our Iron Ore and Coal to build infrastructure when its EU and USA markets are not recovering
- EU , Greece and the others Spain Portugal Italy seems like 5min to midnight, more money printing

- Our Bunch of politicians seem to think they can spend money on a galaxy of wasteful projects and there will be no final account. To top this off they are indulgent enough to believe that a Carbon Tax will be productive and actually have an effect on climate when we export vast amounts of thermal coal for China to freely burn. They are laughing.


Patience runs out at some point for everyone.


Cheers