I am certainly not qualified but here are some thoughts. IMO there are a few reasons. Here are just some:
1. Firstly think back last couple of months, especially around SPP time. Many were saying at their earliest opportunity they would sell, meaning when they could either make a small profit or get back what they put in, they would sell. Today allowed them some recovery to do just that and given they do not have that level of trust with IMU the rest of us glued on holders do, they did not care to trust the science or management further and sold. If they have done so it’s their choice.
2. Secondly, this is the market. It lives and breathes by buying and selling. Simple mathematics. Buy low sell high. Those who trade, and even some holding for a long time and bought anywhere below the 5 to 6 mark, could today make a massive profit. Especially if you are buying a couple of million shares. Imagine. Buy 2 million shares at 5c = $100,000. Sell 2 million shares at $14c = $280,000. That is $180,000 profit less tax, @current rate if not held for 12mths, @50% discount of current tax rate if held longer than 12 mths, @10% tax if held less than 12 mths in an SMSF, or 15% tax if SMSF longer than 12 mths. BIG incentive for many.
3. Thirdly, some investors, knowing there is going to be a pull back, will sell 2 million shares and make $280,000 for shares they got for $100,000. Once sold, they wait for shorters or natural attrition to bring the price down then buy back in and get heaps more share. Back to 10c, and they now get 2,800,000 shares, that’s 800,000 more! they just have a CGT or SMSF tax event end of the financial year.
4. Most common, are the dreaded SHORTERS who have already been on here today bragging about their exploits.
It didn’t take a genius to realise that after a few days of consistent large gains there was always going to be a BIG pull back.
Put all of it together, probably with many other reasons, and there you go.
You may have noticed today that after the FOMO hour between 10 and 11am, the sell side on ComSec increased quickly from around the 340 mark gradually up to over 800, while the buy side reduced from over 1100 down to below 800. That is the profit taking going on.
Long term holders ignore all this noise and ride the roller coaster. IMU has many many great things in front of it, and IMO we can be here to gain off that. Great company IMO, and the fundamentals are there, and with CF33 and AzerCel the rise up is inevitable over the next few months, NOT just days.
(20min delay)