“They have a great resource.....but whittle the value away over time!!??!!” Kempeman, I agree with you 100%.
They do indeed have a great resource, and without doubt, they have been instrumental in not looking after the share price. Most ‘in tune’ directors attempt (and mostly succeed) in ensuring a buoyant SP when the resource is one that requires share price ‘maintenance’ and nurturing in its formative stages. I’ll get to why this is important, later.
I have heard from the directors on a number of occasions “I don’t care about the share price” with the add-on that goes something like “it’s the end of the day that matters”. To a certain extent I agree. However, being nonchalant about a resource that is yet to be in a money producing format, is not naturally conducive to a buoyant share price. This is obviously the case with SAS.
“Patience” is fine but wears thin with investors who have an expectation that the share price of a resource touted with so much potential, fails to rise gradually, even on the back of positive announcements. When shareholders’ perceived expectations are not met, they naturally feel jilted. The choice then becomes ‘hold or sell’.
I am not one to promote share price manipulation, but I do see the merits in share price 'maintenance'. A buoyant even static share price is by far a better option for existing investors. More so for future investors who will be required to foot the bill in future credit raisings.
The amount of money required to fund the commissioning of the 200x constellation does not change by much. However, the share price at which the money is raised, does change. With the lowering of the share price, comes a greater dilution of share price to raise required funds.
My belief that a major telco orientated investor, to cover future funding would have come on board by now, was clearly wrong. SAS have sold the story but not the book! Given the last CR lackluster response, it is clear to me that ‘the funding hat’ needs to be passed around to a much larger and deeper funded circle in the future. Perhaps a global bank / broker with massive holdings from large global retirement / investment funds, will help secure funding until SAS becomes self-funding.
I am concerned with the lack of share price maintenance that is being done to manage a stable if not gradually growing share price, commensurate with advances made up to and including the first of many launches.
The dwindling share price not only sends a negative message to would-be investors, it also lowers the bar for existing shareholders potentially diluting their holdings and setting up a case for a future consolidation of the issued capital.
Consideration for shareholders via frequent company updates provides added understanding and helps prevent unfounded negative ‘assumptions’. With continued lack of information comes uncertainty resulting in a fragile share price as investors (by nature) gravitate toward the ‘negative’ instead of the ‘positive’.
A consolidation may not necessarily be a bad thing – I just think it should not be necessary if the price was managed better!
If there is an upside to the lower share price, it means the major shareholders are less likely to sell any portion of their shares. If they did sell at these lower prices, it would make it an easy hostile take-over target….. and that is one thing they do not want at this early stage.
Am I surprised by the recent SP decline? – yes. But that is all part of trading and to not expect the unexpected is somewhat foolish and must be accounted for in your trading plan. Do I still believe that SAS is, as I have previously claimed, one of the best if not ‘the’ best investment opportunity I have ever seen? – yes. The technology and business plan behind SAS is a winner, IMO.
“………a company's stock price reflects investor perception of its ability to earn and grow its profits in the future. Generally speaking, the higher the stock price, the greater the optimism about the company's prospects. As a company's stock price increases, so does its market value.”
This is a vital part of the business that is not being looked after at this stage. It needs more attention going forward.
SAS Price at posting:
9.1¢ Sentiment: Buy Disclosure: Held
