Are we back to earth yet.Is there some resemblence of analysis...

Are we back to earth yet.

Is there some resemblence of analysis that make sense.

Current ERG Issued Share Capital (excluding potential share conversions etc)

Current Issues Capital = 927.7 million
Current Share Price = $0.345
Current Market capitalisation =$320 million

Wow what a fantastic number for a company that makes losses. What are you all buying. Blue Sky predictions from a company that has failed to deliver bottom line returns to shareholders.

Please take the time to review the balance sheet. It is full of realisable assets. R&D, long term contracts that make losses. Not to mention all the liabilities that are on and off the balance sheet

Even to maintain the current market capitalisation and on a very aggressive PE multiple of 25, the company would need to generate an after tax profit of $12.8 million,

This is based on the current market value of approx $0.35.

On a theoretical value of $1.00 per share ( on a PE multiple of 25) the company would need to generate a profit of $37 million.

I would suggest the company is a long way away from this horizon. Basic logic would suggest that the current stock price is over inflated.

Lets consider the current share price in light of the "going concern" issues and the underlying loss.

The market often trades outside off logic parameters. This is just another example of that imbalance.

ERG is a classic example of a stock that is fueled by traders, working on a margin and spread. This stock is rare in its quality to draw attention to itself. market sentiment and emotion fuels the price on both sides of the equation.

Good Luck.

Oh buy the way, How are all the ERGG shareholders feeling. A little bit nervous about the future. Can you sleep at night thinking about the next interest instalment. Will it be the last..

You all need to understand the risks JUNK BONDS yeild this level of return for a reason, because they are high risk investments pure and simple.