The following is OPINION and written in good faith from a past large investor (now- very minor holding).
This stock should be viewed as a learning curve and nothing else, as a holder you will at least then learn the following rules which will lead you to better future investments if you can salvage any money after exiting AUZ.
- Does company have a professional, experienced, accomplished and respected management team? An essential element not an option. AUZ fails hands down on this most essential element
- Does company have a tight share register? – AUZ fail, register nearing 4.5 Billion Shares – Even if this venture got up and running the shares would struggle to exceed 20c – just do the maths, work it out yourself.
- Are management holding close to 20% of fully paid stock (not only stock options)? – AUZ board – Fail
- Do board salaries reflect where the company is at in its development cycle? – AUZ board – Fail
- Does company maintain a professional relationship with regulators and ASX – AUZ fail, I’ll leave you to research the fractious relationship AUZ have with ASX.
- How are other companies performing within the company sector? CLQ are a pretty good comparison.
- What is the capex and how strong is investor interest – risk v reward? Ahh not good, not even cashed up miners showing any interest
- Can my money work better for me in a different stock? – Loose the emotional attachment and you’ll quickly see the answer to this question.
There is no offtake deal, this was all concocted to access more capital to enable continuation of the company, and you may even find someone who might suggest it to be the behaviour of a Ponzi scheme. I don’t think that but maybe there’s someone out there that does) Note – there is nothing illegal in the way the company raises and burns money, as I alluded to in a previous post, bad business management is not a crime, but any misleading company announcements could be an undoing. For now the big salaries and excessive capital burn will continue for another 12 months, then simply rinse and repeat. Ask any long term holder, all seen this before, not once but many times.
$5.2m Capital raised in less than a day – WOW! Someone really wants in – WRONG!
The capital partner was in place before the capital raise was announced and the deal is simple. AUZ have an unbeatable track record of borrowing from low tier money lenders. The funds are unsecured so the deal has to be sweet. In this case 1.8c, small discount to market which enable a buffer in case the hype can’t get the share price very far north. But the sweetener is the potential pump of news leading up to the end of September, for which the board will ratchet news and take care of its end. May I suggest that’s already started today with yet another glossy Corporate Overview - WTF, we’ve read it all before – multiple times. Yes you get an A in PowerPoint presentation but seriously this is not a TAFE course!
The opportunity ahead – (my opinion based on past experience)
THIS IS A PUMP AND DUMP (which may dump earlier if the lender feels nervous)
Ride the pump and sell the hell out!
Stock prediction, under 1c in October
I will definitely be selling the tiny amount of stock I still unfortunately hold.
Ride the pump, beware the dump.
Oh, a little suggestion, to monitor the increased flow of shares over the next month why doesn’t someone post a daily turnover ticker, this will help monitor dumping volumes and may give light to the sell indicator as the financial partner starts to get nervous and the numbers suddenly break down.
In closing, this item is my personal opinion, you need to do your own research to make financial decisions – for God sake start your readings in Early 2017 and track the pattern of this company.
(20min delay)