My thoughts re the $2mil deposit for Akjilga. Firstly, it was 50% of the capital raised at IPO - a big stake for a small company like ROS.
I'm not too surprised that they couldn't get funding once the market turned south, but with two massive purchases in a matter of weeks totaling $112m, from a company worth only $12m(?) was it every really going to come off?
Wouldn't it be considered corporate suicide to risk that amount unless you made sure you could get the vast majority of it back, if, for instance you couldn't raise funds, or on due diligance found the resource did not meet expectations? I haven't seen a situation like this before so help me out, people.
Also it seems that the vendor has notified ROS that they are in breach of certain covenants in relation to the deal. I find it astonishing that anyone could embark on such a transaction without first ring-fencing it, thereby protecting the buyer from any lawsuits should anything go wrong.
What's happened here has been simply astonishing given the apparent negligence.
This whole debarcle serves as a warning to all shareholders who invest in shares like this to be careful about who you trust your money with - the people sitting in the boardroom, and their previous history with other start-ups.
Also, the classic spin and hype generated on the ROS threads will hopefully remain to demonstrate how easy it is to simulate excitement in a stock that actually has nothing more than pipe dreams and shareholders cash to waste them on.
DJ
ROS Price at posting:
35.0¢ Sentiment: None Disclosure: Held
