a different point of view

Averaging down is suicide unless you 100% believe in a stocks future and the fundamentals are sound.
Many investors average down on bluechip stocks knowing that they will recover.

So here's a different point of view on the current SP for MPO.

We have had a placement of 133M shares at 0.25c which was finalised on 05/09/2007.
The placement was executed smoothly on the recommendations of Bailleaus & Wilsons.
They would have done their homework and easily justified the then discounted price.
Along comes a market correction and our two brokers are now a little embarrassed to say the least.
Their clients are locked in and rumour has it that they wanted to re-negotiate the price.
MPO stands their ground and says no, the deal was 0.25c.

To firm up their recommendations a broker valuation is released at 0.45 cents per share.
Trouble is that their clients, whilst trusting the potential future of MPO, are "not happy Jan".

Here's the slant:-
Maybe, to appease their clients, the brokers are feeding stock at theses levels to average down the placement price for holders.
If that is the case, then 133M shares need to change hands.
We know that Bailleaus and Wilsons have the stock due to their early buying at very low prices and their exercise of options.

Since the placement date we have now churned over half the placement volume.
We still have a few million shares to go.
When they have all had their fill and their average holding price is around 0.21-0.22 cents MPO will fly.
The dummy sells will be pulled and the placement holders will pat B&W on the back.
Its no skin of their noses as they are keeping their clients happy and making money by selling their shares.

The good thing is that well over 25% of the company will be in very safe hands and the SP should steadily rise.

Imagine a man walking up a hill bouncing a yoyo.
The hill is the general direction of the stock and the yoyo is the stock price.

Remember though, he can bounce a yoyo whilst walking down a hill.


cheers
kse3137