You can tell by the thinly traded nature of this stock that the...

You can tell by the thinly traded nature of this stock that the VAST majority of holders of the free float are long-term holders. Dips in price are of no great concern to long-term holders, in fact they give us an opportunity to acquire a little more stock at a favourable price. I for one am absolutely stoked that the take-over has fallen through, it gives me the opportunity to realise the long-term value that should be immediately apparent to anyone who can read a set of financials.
What we are more interested in is the performance of the underlying business. Unless there have been significant operational issues (given there has been no disclosure, I assume this is not the case) or unless there has been some problem with the development of the Phase 4 production, then we stand poised on the cusp of an amazing result in calendar 2012 (latest guidance is that the Phase 4 building is complete & first production is in January).
That said, we should expect calendar 2011 financials should be marginally below calendar 2010. As stated in the Chairman’s address, borrowing costs will be higher this year as Phase 4 is developed, add to this some (rather large) costs being mysteriously (I say mysterious as in my view a 5-fold increase in ‘General & Administration’ costs probably warrants more than the 2 vague lines in the Appendix 4D) 'expensed', yet despite First Half 'Finance' costs being up by about $0.7m and 'General & Administration' costs being up $3.9m in the first half, profit before tax was still up by $200k.
This indicates on a like-for-like measurement basis profit before tax would have almost doubled period on period (i.e. absent the finance costs & expenses). The bad-minded among us may be inclined to wonder if accounting chicanery is being used in order to make the results appear weaker than they are (perhaps to facilitate a reasonably priced takeover). I will give the benefit of the doubt and say the expenses are genuine, but if the mysterious expenses are not repeated in the second half calendar 2011 results should not be materially different from 2010. We need to bear in mind that year on year nylon prices are up nearly 20%, and despite oil prices being up about 30%, I still think net margins should be maintained or even improved in 2011. Furthermore, with big production increases, calendar 2012 should be a record year for both revenue and profits.
My advice, don’t be distracted by short-term market distortions, remember why you bought the stock in the first place, if the fundamental story is still the same, back your original judgement - Eternalgrowth