This is just the big players positioning themselves. But the announcement can't be too far off now. It's 2 weeks since the offer was received and we have no real details.
In my mind, there are parties that want to suppress the share price. If we go up to 60c on the ASX, Hanlong will have to increase their bid above that otherwise we will just sell out at market. So if Hanlong is serious about the takeover, they will want to keep the price as low as possible until any updated offer (if it comes) is made. My question is why the other big players don't come in and exploit this. It seems that the downside at the moment is 3c (50c should be a floor given the bid no matter what happens - other than a market meltdown) but the upside is up to about 12c. If Hanlong and it's advisors are selling down into the market, surely the big hedge funds etc would get wind and beat them at their own game by accumulating as much as possible (knowing that the final bid will still have to be higher). Where there is manipulation, you can always exploit that knowledge.
Either way, this looks like a good buy opportunity to me with not much risk while it all plays out. Hopefully we can beat them at their own game!
SDL Price at posting:
53.0¢ Sentiment: ST Buy Disclosure: Held
