yip, KAR mgmt (and by default KAR shareholders) are in between the two aforementioned geographical destinations...
worse still, it seems to me that KAR mgmt are virtually powerless to do anything at the moment about the downdraft in KAR - good drill results have been met with apathy, potential farm-outs have been met with apathy, upcoming drill programs have been met with apathy, upbeat statements have been met with apathy - in fact, I think it is safe to say that whoever is selling KAR simply does not care about any fundamentals as they are too fixated on their own game plan...
that said I know there is 101 ways to put negative spin on all of the drill results, farm-outs etc - most of which revolves around funding going forward.
however, what I find strange about the downdraft is that there appears to have been very minimal movement in the top 20 shareholders - i.e. no major player seems to have sold truckloads of physical stock (I say physical, but we all know that there are oodles of derivatives that could be used to sell).
I don't profess to know who is selling or why they are doing so, but my personal view is there are several main contenders, and it may be a combination of these that is at play;
1. short seller parasites simply looking to fleece value out of driving the price lower.
2. large insto shareholders generating rent from their large holding by either by lending out stock (which is subsequently shorted) or aggressively algo trend trading the stock themselves (i.e. buying & selling like a spot trader skimming nickels & dimes along the way).
3. unknown predator belting KAR to soften them up for an unpalatable farm-in or takeover offer (e.g. Gem Diamonds "may" have done this prior to their discounted takeover of Kimberley Diamonds a few years ago).
4. large activist insto shareholder/s who are seeking mgmt changes at KAR who are belting the stock to increase the pressure on mgmt. The vote against the Rem Report was a warning shot across the bow, and at the next AGM another vote against the Rem Report will result in a compulsory vote on the entire board (e.g. PEK had that on their AGM agenda this year - thankfully the Rem Report was adopted thereby negating the potential board spill).
5. Joe Schmo spec punters getting minced by their margin lenders and having to sell into every dip, thereby increasing the downward pressure.
6. small and mid sized insto & private holders abandoning KAR to put their funds into perceived safe stocks which pay pissy dividends (even though that strategy is becoming a crowded trade and inherently unsafe).
IMHO the only thing KAR mgmt could personally do that would make an ounce of difference at the moment is to launch a management buy out bid for KAR. The necessary documents they would need to issue would include a very detailed explanation of the valuation behind their bid which would illustrate to the market the in-house valuation and the facts/details/assumptions behind it. One would expect the in-house KAR valuation is significantly higher than the current market price!
Obviously the chance of this happening is 2/5ths of 5/8ths as I doubt the KAR mgmt have enough brass razoos to rub together to launch a buy out. A leveraged buy out strategy is equally unlikely as there are very few Aussie bankers who would have the balls to back any LBO, and sadly most of the offshore bankers are still recovering from having the brown stuff kicked out of them a few years ago, so they don't have much appetite for LBO risk either.
Perhaps the only way such an audacious KAR mgmt buy out play could unfold is if;
a/ they Geoff Dixon gets involved, or,
b/ they get that mysterious Scottish gentlemen who took an interest in David Jones a few months involved!!
lol - or should that be "col" (i.e. crying out loud)
KAR Price at posting:
$3.57 Sentiment: LT Buy Disclosure: Held
(20min delay)