Unith Price Action Well price is doing what I expected. By depressing price and taking advantage of CR profit taking (and yes, a director needing liquidity), the majority of the SPP duration has appeared unappealing to the retail market. It is all part of a playbook. Try and take large allocations while keeping the share price depressed, take advantage of negative sentiment and encourage sellers to fill the ask with decent liquidity. They then soak up legitimate sells while trying to avoid excessive bid interest by dumping into the bid when price reaches a certain level. Then knowing full well the SPP will be fully or oversubscribed (because they applied for a large allocation), they wait till just before the SPP results are made available to the market, and they buy up all the sell-side liquidity up to the SPP price of 3.3c. It is just a fancy, drawn out liquidity grab to get the best fill at the best price, while also trying to encourage further selling as price recovers. It is also not an insignificant SPP. 500m is around 2% of our MC I think, which is a decent piece of pie to fight over for institutions. If you think the above sounds weird because it involves institutions buying and selling at the same time, that is exactly what they do - banks do the same thing when they trade currencies. They will sell to encourage other sellers, and use those sells to fill their large bid orders for the next move up... how else can you get a large fill at a good price. Instos are like mack trucks, they need large amount of room (liquidity) to move, not like us retail traders - who are basically tourists riding Vespas - nice and nimble (but stay out of the way of the mack trucks). Anyway this is all just my take, I have no proof, it could have just been legitimate selling that has become exhausted, but the timing is a little convenient as is a lot of the price action and order pulling I have seen on the tape. I just have had experience with similar price action time and time again and it makes sense psychologically.
Macro picture We may see more selling and consolidation over the next few months and the macro picture will fuel sentiment I think. There is still uncertainty in the broader market following the banking sector liquidity issues in the US, and this is making the inflation battle more difficult. However, growth stocks (UNT can definitely be considered a speculative growth stock) are routinely regarded as inflation hedges, as you require higher rates of return to combat the effect of currency devaluation. Despite sentiment, money actually flows into growth equities in inflationary periods as they are favoured over bonds because why would by a bond when the yield of bonds in a few months will be higher, rendering the bond you just bought less valuable? Anyway, I am getting a bit macro-heavy. Point is, keep an eye on the macro picture. Following the recent banking liquidity issue in the US, there is still alot of uncertainty in the market but indices are in a short term uptrend, but expect uncertainty/volatility in wider markets while central banks keep raising rates. I feel UNT is more insulated to this than the ASX200 (which is heavy in financials).
Outlook I feel that when rates are put on hold (when inflation keeps dropping enough for RBA/FED to feel comfortable) - this will be bullish for equities and provide some much needed certainty and confidence for everyone (most of all borrowers that want some certainty on their repayments). I certainly feel privileged to buy at a time where the sentiment has been sour, as these opportunities are short-lived (bear markets are shorter than bull markets). My outlook goes from bullish to super bullish IF the big deliverables that UNT has in store for H2 2023 happen at a time when rates get put on hold and the market has more certainty, as we should see bigger institutional money enter the market (much like it did during the risk-on period heading into 2023 and in January). I dont think the SP will have any problem pushing oppies ITM as we move from H2 2023 into 2024 Again - just my take on things. I am very excited to be along for the ride with you all this year. The CEO is ticking many boxes for me and I am feeling even more confident after the recent webinar
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