country bob->"When there is a steady flow of shares being sold and bought it makes me wonder..."
My guess is that the persistent seller of recent weeks is the same person/organisation who gave them the $2m towards the end of last year. They bought 12m shares at 17c and are selling at about 15c, taking maybe a 15% hit on their capital, but being left with that share option at 25c in October. It is a punt, but a relatively cheap one if they can recoup $1.7m of their $2m outlay. The option is 1:1, so they need a price of 27.5c within the next 9 months to break even. (Buy at 25c, sell immediately at 27.5c gives 2.5c profit times 12m is $300,000.) Anything over that is profit. That is the way to invest in risky stocks!
The buyer's motives escape me. The IWG product has not sold profitably (in any of its guises or brandings) since inception. In the last year they have raised $9m, plus another $1m as a loan, and sales are still pretty much zero. They got the long awaited big reseller deal (Telstra) and sales still did not budge. They have taken over Blue River IT and acquired all their sales expertise and connections, and that did not help. They have put together their own sales team and still nothing. This might have been a credible product in 2008, but in 2016 it is pretty clear no one wants to buy it. It seems much more likely to me that IWG will go bankrupt in 2016 than turn the corner and start to gain huge sales, so why would someone still want to accumulate the stock?
I guess the answer is that some people still think that IWG is fairly valued at sales of 0.1% of market cap. Personally, common sense kicked in for me months ago, but others must see it as a punt worth taking.
IWG Price at posting:
13.5¢ Sentiment: None Disclosure: Not Held
