What a remarkeable turnaround in sentiment we have seen towards...

What a remarkeable turnaround in sentiment we have seen towards this stock over the past six months.

Until early September, Phoslock was still stuck in the mire of suspension. The relisting later that same month brought some relief to long-suffering shareholders, but also triggered a share-price plunge, as burnt out holders bolted for the exits.

It is easy to forget that as recently as the last trading day of 2022, PET shares were trading for as little as 0.032.

So,the lucky buyer(s) who managed to get in at that bargain-basement price on that day would now be sitting on a paper-profit of 100% in just over a month. The stock-traders who have been watching from the sidelines won't be forgetting that in a hurry.

And maybe that's the point.

While I love the idea that the surge in the PET share price over the past few weeks might be indicative of some looming major contract, to my mind, this has got the fingerprints of Freedman all over it.

As has been discussed here at some length over the past few years, even though Laurence Freedman officially left the company last May, he still exerts influence from the background. Barry Sechos, who was appointed as a director in 2021, has a connection to Freedman via his company Link Traders, where Sechos is a director, and likewise, Brenda Shanahan previously worked at Freedman's company, Equitilink.

Indeed, now that he is no longer working in an official capacity at the company, his influence over the company is probably greater than ever before.

Admittedly, at this point, it is impossible to determine exactly who has been behind the buying that has led to the dramatic spike in the share-price. But whoever it is, it certainly looks as if the mystery buyer is making a concerted effort to influence the share-price trend.

For one, the timing of the share price surge is rather curious. As noted above, the share price was at rock-bottom at the end of December. The dawning of a new year seems to have recharged Phoslock's battery, giving the share price a new zest for life.

Maybe I'm being too cynical, but I have trouble believing that the outlook for Phoslock could have changed quite that dramatically within the space of four weeks.

Could the price surge be down to a bargain-hunting small-cap fund manager? I also have some difficulty believing this. Given the lack of news around the stock, I can't see why an institutional investor would suddenly rush in and push up the share price so forcefully over such a short time-frame. Surely they would bide their time, and soak up sellers near the bottom before driving the share price higher.

Likewise, look at the closing trades yesterday. Just over $1000 dollars worth of shares purchased at the last second, pushing the share price up ffrom 0.062 to 0.064, seemingly calculated to ensure the share price closed at 0.064c for a second day running.



Anyway, from where I stand, the surge in the PET share price, while welcome, looks quite calculated.

For this reason, I don't agree with Takizawa's suggestion that the share price will soon be back above 0.100.

While I hope that Takizawa is right, and that I am wrong, it feels to me as if a major market actor is attempting to hack the share price chart, with the likely aim being to drum up interest in the stock.

Once Phoslock managed to escape from the limbo of share-suspension last year, the greatest danger facing the stock was that the negatory sentiment around the company would result in the share price entering into a death-spiral, falling to new all-time lows, a circumstance which could be difficult for the company to recover from.

However, I suspect the greatest 'danger zone' was going to be May-June this year, when tax-loss selling tends to kick in. Because Phoslock was suspended for two years, things could have gotten really ugly in the tax-loss selling period, as the stock was set to get whacked by three years worth of tax-loss selling.

But this heavyweight buyer, whoever it is, has now probably stymied the doomsday scenario.

This isn't to say that the outlook for the share price is now rosy. Rather, I think the intended purpose behind the aggressive buying of late was to try to create a 'floor' for the share price.

The dramatic move in the share-price over the past few weeks would have certainly caught the attention of traders, and I doubt they will be quick to forget. In future, if the PET share price falls dramatically again, you'll see bargain hunters moving in, in the hope of catching a similar rebound.

In summary, in my personal view, the sudden surge of buying of Phoslock shares is probably an attempt to finagle the share price trajectory on the part of some outsized player, who I suspect has got some connection to Freedman.

The motivation is probably personal: given his close association with the company, Laurence Freedman's reputation has taken a battering from the Phoslock shenanigans over recent years.

As Amused Observer pointed out recently, over recent years the conduct and negligence of the Phoslock leadership team has been a particular preoccupation of a certain 'respected journalist' (presumably, here AO was referring to the ex-Motley Fool stock-huckster Tom Richardson, who, as some holders might recall, went as far as labelling Phoslock a 'fraudulent company' in one of his reports on Phoslock in the Australian Financial Review back in October 2020).

Apart from that, there was that now infamous, and rather unfortunately timed, Alan Kohler interview on the 06/08/19, which in hindsight, should have been taken as a sign that the stock was at 'peak hype' :the share price had hit its all time high just a week prior. It certainly wasn't a good look for Freedman, especially in light of his subsequent stock disposal.

With his reputation at stake, Freedman has a huge incentive to make sure that Phoslock gets back on track. I think the coordinated buying by the directors last year was part of that, and likewise, I suspect the aggressive buying over recent weeks that resulted in a spike in the share price may be another element of the same strategy.

My suspicion it is that it all forms part of a plan, that was most likely concocted during the two-year trading halt, aimed at restoring confidence in the company and ensuring the company continues as a going concern.

If this is right, I still think the road ahead will be bumpy. I tend to think Phoslock is a long way off from securing another multi-million dollar contract, although a number of smaller contracts, each say half-a-million or so, is certainly a possibility.

Of course, I could be wrong, and maybe some positive news about a major new contract will be released by the company in the next few weeks.

But one thing's for sure. There are a lot more eyeballs on Phoslock now, than there were this time last month, and for holders that can't be a bad thing.