All of this discussion around conspiracy theories re what Regal will do with their shares are piffle from people who clearly don't know what they are talking about.
Regal is a prominent Australian hedge fund, which invests where it sees value, whether short term or long term. Sometimes, some of its funds will see value by shorting stocks as well.
It is a good thing for institutions to be coming on to the WGO register - it supports (and potentially drives) the share price by soaking up shares from those who want to sell. WGO is not a very liquid stock so my guess is that Regal are not in it for the short term - it would take months for them to sell down 64m shares without moving the price too much. Clearly, they see value and indicators like STX taking a stake would have been a strong indicator for them. For this reason as well, their holding is typically stickier than retail investors.
The Regal stake is actually a good sign to others in the market, including 'smart money', that there is underlying value in WGO, whether that be long term, fundamental value, or for a business which might be in play, etc. In itself, that is a positive because I don't see alot of buying pressure in WGO at the moment.
The idea that Regal would be in cahoots with Strike is ridiculous. Firstly, it is against the law - they have a fiduciary duty solely to their own investors and would have to declare themselves as an associate if that was, indeed, the case. Secondly, anybody who has worked with such a hedge fund will know that professional hedge funds are only interested in making money and will think only of their own interests. These are not charitable organisations - if it pays to go against Strike in order to seek more value in a bid, they will do that. Similarly, if it pays to strike an arrangement with Strike as a pre-bid stake, they will do that as well. But you can be sure that whatever they do, they will only be acting in their own interests. Similarly, Regal will not consider what is in the best interests of the rest of the shareholders, it will only act in its own interests. That to me is no different to any other shareholder.
Investors should also understand that these hedge funds are busy keeping tabs on dozens, if not hundreds of stocks and are making investment calls all the time. The idea that they might have the inclination to work up some complicated acquisition strategy with one particular company (potentially cutting across the laws of the land) is ridiculous. Investment banks working with a company like Strike might do this, but even that is not straightforward because of the association rules I mentioned above - but investment banks (in that case) are not working for themselves (with a fiduciary duty to their own investors), they are working for a client. Regal is not an investment bank, it is a hedge fund.
WGO Price at posting:
22.0¢ Sentiment: Hold Disclosure: Held
