"As little as 2 weeks ago management were saying the CN would provide the funding and the flexibility to drive growth in the short term. 2 weeks later they tell us there are organic deals in the pipeline that will require certain D/E levels, and only 2 weeks after being approved the CN does not provide the flexibility to support those deals."
Can't argue with any of this. As a shareholder looking in, its not pretty at all. That's the bottom line.
The company was just seeming to gain some traction.
Some, think there must be a reason or new development in play to justify pulling the trigger.
Many others, including myself expected to see organic deals anyway. That's been the theme since February (when they first flagged the need for WC, I might add).
Most would have to agree that there must be a reason for the change in tune apart from the obvious duty to raise funds for the company in the most cost effective manner available.
I just hope it's a positive reason and not a negative. And this is my main problem. I'm now blindly hoping that things are ok.
The D/E level theory, to secure deals and gain market interest is feasible, otherwise why not sign the deal/s and then raise post announcement with clarity at what would be higher levels.
The other option is that track is not as stable as thought or they expect further adverse forex movements. There's also the possibility that full year results are messy so the trigger was pulled before it gets ugly.
This stock is constantly proving me wrong. (No that not an invitation to the trolls but more humility)
I have adjusted my model to factor in this new dilution and it still looks very attractive, if not more, due to net debt levels.
I want to participate in the raise, but I'm already overweight and at a heavy loss. I read an excellent post by you on the STT thread the other day regarding this very subject.
Actions over the next quarter will decide it for me. A return to silence by management now will be a red flag for me, as it would demonstrate a repeat of February/March.
I have been in contact with Dom several times regarding this development. He has been very receptive, especially considering it was basically a whinge from my part.
But the reality is that the majority of my questions are sensitive and so un-answerable.
So I guess it comes down to what gassed says about whether I can step back and trust what the company is doing.
And just to clarify for the thread, the above is not in anyway a criticism of Dom as a person. It's simply my view of the company from the outside.
CM8 Price at posting:
16.5¢ Sentiment: Hold Disclosure: Held
(20min delay)