decision

Thought I'd start a new thread so people could say whether they will subscribe, and their reasons. This might be useful, if for no other reason, than small shareholders have a major coordination problem; that is, knowing what other people are doing will influence your own decision because GXY needs a minimum amount of capital to remain solvent.

As for my decision:

I've decided not to invest any more money.

Previously, I was willing to risk a bit more money on the possibility that this is being set up for a backdoor takeover (Creat, the Korean, something via Deutsche Bank). But at that stage I had faith in our two main assets - Jiangsu and SdV – underpinning a shareprice of at least an 8-10 cent asset values.

My reasons:
- Jiangsu still having ramp up issues (our only cash producer). When will it ever be cash flow positive at a level to cover liabilities?
- SdV uncertainty
- More debt to Deutsche ($5 million). In the meantime, we are probably more in the negative just to keep the doors open. I'd expect we'll find more short-term debt was acquired after the SPP is finalised. So if we raise the minimum amount ($12 million) most of that will go straight back into repaying short-term debt and we are nearly back in the same position that started this whole crisis off with regards to cash flows and near-term liabilities (i.e. the big Chinese creditors).
- We still have no guidance on those convertible notes, which might come due in November. That's the elephant in the room that no one mentions. Clearly, the noteholders are playing hardball or else they would have given the company an indication that they aren't going to exercise that option early, and provide GXY with some certainty going forward.
- Finally, we have the huge amount of options that will mean arbitrage will keep the share price anchored near 8 cents. So we can't bank on capital gains allowing us to recoup our losses through capital gain for a very long time.

At the moment, the only beneficiaries seem to be management and directors (i.e. keeping their paychecks after running the company into the ground) and the large shareholders (i.e. who have a information advantage vis-a-vis retail shareholders, if for no other reason than they know whether they, themselves, will (over)subscribe). In the meantime, the long suffering small shareholders are expected to throw more money into the void and simply hope for the best (i.e. that major shareholders will (over)subscribe, that bond noteholders will not exercise their early repayment option, that the board and management will be downsized to a reasonable size, that the Koreans proceed with SdV).

I am a risk taker by nature, but this is fundamental uncertainty at its best. I would prefer to roll a dice - even a loaded one - as I would have some basis for assessing probability. That fundamental uncertainty may be intentionally created by various players (without a single grand plan/conspiracy), but that doesn’t help me with my decision (as a information poor small holder). According to the KISS principle – Galaxy might be cactus, at least as a public company – it’s best for me to keep hold of my money and put it into the many other bargains currently available on the ASX.

Sorry guys for being such a a downer, if nothing else, I hope these helps other people make their own decision.