My view (and it is based on nothing other than watching pennies and markets for a while) is that there are still a lot of people who got long at 3c not that long ago, in the CR with options so there is still plenty of profit for them at these levels.
With a drift lower stops have gone off, either those who would have liked 4-5x but it hasn't materialised so will take 2x or those who got long higher and now have to take a loss. The 4m shares at 5c really was the last opportunity to sell any volume. I think this stock has had enough CRs in the single digits that people end up with millions of shares and struggle to get out, so that was a good out in what is an illiquid stock relatively speaking.
The burn rate looks high, which may have spooked some people, it looks like we only have till December but hard to understand the drop off in costs post completion of the vertical integration, but surely there must be a material drop in burn rate so it is not as bad as that.
Finally we are getting close to May where, (and again this is a belief), I think we will see weakness in a lot of stocks after such a great run in the first 4 months, especially tech stocks. Corporate earning may start to drag for the first time with interest rates starting to bite, and revaluing commercial real estate could cause a broad market sell off to which BLG is not immune.
I think you will be able to accumulate some cheap stock here given the instos backed it at 6c and we are in the best position we've been in. Having a US profile where the scale of funding is on a different level to Australia, also should make a company with this level of capability and a market cap this low very attractive to a bigger player in this space.
All IMO
BLG Price at posting:
4.9¢ Sentiment: Buy Disclosure: Held
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