Ann: Notice of General Meeting/Proxy Form, page-34

I hold and substantially for this reason. However I'm always on the lookout for the counter-thesis. I believe responsible investing is about looking for ways you might be reading the situation wrongly.

What do you think about this as a counter-thesis about the idea that we should have confidence because directors put in $300k each:

Sometimes in a game of poker, the first few rounds of betting can be quite expensive. As it approaches the final card to be turned over and the final round of betting, you become less confident that you will win. You've already bet $10,000 and calculate that the other players have probably got better odds than you do of winning. When the final round of betting comes around, it's a $100 bet to play.

You decide that given your existing stake ($10,000), another $100 is worth throwing in even though the odds are small. Losing $100 will be painful but its worth it to keep alive the chance, though small, of winning the enormous pot.

To apply to LNU... in assessing the significance of the $300k from 3 management players, we would also want to know (1) how much they already have invested, and (2) their net worth.

Let's say the answer to (1) is $2 million each, and lets say the answer to (2) is $10 mil. In this case, $300k represents a fairly small proportion of their net worth (3%). But their existing investment is large proportional to net worth (20%).

Now - If the directors feel that (a) the company is in dire straights and may not ever turn a profit, (b) but there is a slight outside chance that it might if the cards fall the right way... but (c) the only way to know is to fund operating costs for another year or so... They may be prepared to chip in a relatively small extra bet just to keep their game alive.

So on this counter-thesis, the existence of the $300k investments may merely mean the directors haven't lost all hope. They can't pull their money out without crashing the share price because it would reflect a total loss of confidence, so the only chance they have of recovering their initial investment is to play one more round, one last throw of the dice.