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BerserkWarrior

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27/03/23

11:26

Post #: 66972995
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Originally posted by 2ic: ↑

Ody heard on the grapevine Min Res wasn't competing some while back and so they take a small loss and move on. Hedge funds operate with leverage (borrowed money is much more expensive than it use to be), and want to exit or reduce (hedge) their exposure in case the deal gets voted down. Odey is not a 1.5c arb fund... I suspect they came in for more than pennies but lucked out and so move onto higher reward plays.

Makes complete senses to me, especially iin light of the market correction and liquidity/credit risk hammering the market since Odey first took a position in ESS. The reasons they may want to get out some/all of ESS a couple of cents lower include; better opportunities become available elsewhere, risk management, debt/liquidity management depending on how their other business was performing, their lenders attitude to Odey leverage etc, etc. In this case, I think it's instructive to focus on the fact other arb funds and buyers are happy to take the 1.5-2c on offer against the risk the Scheme doesn't pass. Horses for courses... an arb fund is getting 4% over a couple months, which isn;t bad so long as the risk the TO fails is commensurately low, which buyers obviously believe.

For over 6 weeks the share price action has been telling us a no competing bid is coming. Between the falling lithium price and general market/economic bearishness, no surprise Odey decided the backdrop didn;t suit their style of holdout activism to greenmail Tianqi into lifting their bid 'or we'll vote the TO down' ...

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Thanks for your thoughts on this.

ESS Price at posting: 48.5¢ Sentiment: Hold Disclosure: Held
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Thanks for your thoughts on this.

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