"4. Will the company consider a consolidation of shares?"
Good question, and one I asked at an AGM of another company that has a billion + shares on issue. The answer was that the company didn`t have enough runs on the board re sales and income to warrant it at the moment. I have been thinking about the reason for the reason if you follow. It is easier to raise capital with a low SP than it is with a high SP. The issuing broker or underwriter if there is one can say to his/her clients that you can flick them for a profit with a small movement in price that might equate to a large % gain. This is emphasized in our case by the discount to market in the raising (15%)or there abouts. A small SP attracts traders and makes for a liquid market. The downside of all of this is that we will struggle agaist investors and traders to get a higher price in the SP, so with 1.6 or so billion shares on issue CFU has created additional barrier to a company valuation closer to what we think it might be worth.
This isn`t going away, so in my opinion irrespective of orders etc the buy signal will be a consolidation of the share capital. That will signal that CFU are in charge and not the brokers.
That is my theory, I look forward to the critical analysis
Cheers
G
CFU Price at posting:
11.8¢ Sentiment: Hold Disclosure: Held
