One of the points put forward in favour of consolidation of the...

One of the points put forward in favour of consolidation of the share capital is that it removes a lot of the share trader element.

I have to date not considered this to be a very strong argument as it is just as easy to trade 5 shares as it is 1 share.

But a very interesting point has just been made to me, that does deserve consideration.

I understand that the recent share price decline has been caused by the following holders: SMALL holders that panicked following the subprime fallout, traders (possibly following charts), and other holders that did not hold significant positions that chose to sell because the share price started to decline as a result of the selling from the first two groups mentioned.

It has been put to me that the net % held by the top 20 or 50 has not changed significantly because these people understand the value of the sector and the assets that MPO hold, and the value of the expertise of Gorman and co.

There was a significant increase in the total number of shareholders over the last year (three fold increase), so it is very possible that a number of these have departed the register.

Whilst it was disappointing to witness the selling over the last couple of months, the monthly volume traded is only a fraction of that traded in the preceeding months, which would seem to support the theory that it was the small holder that has departed the scene, as well as the traders who were only buying whilst the company was in vogue.

If a share consolidation removes this volatility, then there is an argument to support the share consolidation resolution.