Does anyone know how the land lies there? It could be a further problem if there are any material margined positions.
I considered trying to catch the falling knife at $2 - but that vague market release was awful. There is a pretty stacked downside at the moment:
* Agree with what folks have said about debt being a curse in situations such as these. And RFG has got debt. There'd be some nervous bankers around. A dillutive capital raise may be required to survive.
* RFG needs strong new franchising agreements to maintain earnings. At least in the short-term (in Australia at least) I doubt they'll get that. There is blood in the water and I doubt the media will leave RFG alone any time soon.
* Seems certain to drop from the ASX200 - so likely to be some re-balancing from funds.
* High risk of margin selling.
If they'd hit guidance, you could cling to that - but that announcement today..... It would have been better to see the whole Exec team out selling pies from a mobile cart to make sure they hit guidance than to miss now.
I think I'll watch for a bit.
RFG Price at posting:
$1.98 Sentiment: None Disclosure: Not Held
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