LDA did put a rocket up the HIO share price. But it was because retail mostly misunderstood how disadvantageous the deal was - although blame squarely sat with the company as HIO incorrectly announced how the deal would work and had to release a correction months later. It was the correction that made it apparent that LDA were able to dump the shares for easy profit. No wonder that HIO called on the facility only once, and thereafter they went cap-in-hand to Regal. The price spiked because of frothy retail buying, just like in BRN. Yet LDA are just there to flip their shares, not to mention the millions of options they wrangled too.
The unfortunate truth is that institutional money doesn’t go near stocks like HIO and BRN; if they could access capital from those markets they’d be conducting capital raises and trumpeting about how glad they are that institutional fund are joining the register, yadda yadda. Instead these spec plays have to go to the lenders of last resort. That in itself is a warning flag to smart money. The top 10 holders on BRN tells the story - last time I checked they were all nominees accounts, there’s no funds anywhere near this. Outside of the boss, there were also no substantial holders (over 5%), not one, in a $1B+ ASX200 stock!
For the record, I don’t doubt at all that BRN has been a good place for many to make money (and well done to them all). But in my opinion it’s an absolute hype machine. Management have done a sterling job in advertising their company to a retail shareholder base who don’t care about financials and simply lap up the story. This is partly demonstrated by the dearth of ASX announcements, and all the ‘updates’ the company does via other means. If it was truly noteworthy - and worthy of proper scrutiny - then you’d see it in an ASX announcement. Many of the popular stocks do the same: webinars, podcasts, LinkedIn posts, etc. Ever wonder why they skirt around the ASX platform to talk to their shareholder base…?
What is impressive is how long BRN has lasted this expensive - but I think the December quarterly is going to make or break things. And I’d suggest the fact they’re calling on the capital this early is a sign that the receipts may not have flowed through, but the cash burn is still, erm, burning. Let’s see.
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