ATS still have considerable cash burn rate. Their hedging position will be expended in a few months. Holding leases, paying management, operational expenses and corporate governance can eat into their modest balance sheet quickly. Very, very difficult environment to raise capital.
Can they go broke absolutely. Will they Who know's. Management are good but can't fight with their hands tied. Oil price, world economies and modest drilling program all went against them. They are in a non sexy sector. They need some luck.
The market is totally irrational. At some stage the market will turn to looking at the real numbers, the fundamentals. The only reason people are buying stocks is there is no alternative to achieve the long standing normal of 5% + inflation. Also companies like Apple and JB Fi (locally) are the beneficiaries of the cash splash by governments. US market trading at a PE of 23! Getting high.
The top 10 US stocks make up more of the DOW than even before. I notice today Aust government started a slow wind back of Job Keeper & Job Seeker allowances.
Other economies of the world are and will have to stop/reduce the big hand outs. This in turn should stop the small retail punters involvement somewhat. All this is just food for thought. I wish I had a crystal ball!!! scary times.
ATS Price at posting:
2.8¢ Sentiment: None Disclosure: Not Held
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