investor relations

There have been a few posts on here recently with people expressing differing opinions on the current situation with the company.

I just can't help but think that Lange has some investor relations issues that need to be sorted out, which would be a surprise given that when he was VP at Schlumberger, investor relations was his territory.

There are a few reasons why I question this. First of all, the obvious one, the current share price. There may be differing opinions on what the share price should be right now, but my opinion is that it certainly should be a lot higher than where it currently sits. You only have to look at the likes of MRM to understand where I am coming from. Neptune is still growing rapidly and stands to post a higher profit than MRM this year, yet they have a market cap only 60% of MRM's, with people seemingly happy to be dumping large parcels of shares at these clearly undervalued prices.

Secondly, MQG was the largest holder and now they are no longer a substantial holder. Perhaps the GFC has something to do with this, or perhaps Lange is taking the company in a different direction to the vision he gave them when they jumped on board at 20 cents and they are no longer supportive of the strategy. Either way, the fact is that they held tight when the share price hit $1.35 in 2007, but were dumping huge amounts of shares in the 30's a few months back. When Neptune released a very impressive quarterly result at the end of January, MQG filled the 31 cent line all day which prevented what would probably have been a significant move. Furthermore, as soon as the recent trading halt was lifted after the placement, they sold a further 25 million shares to then remove them as substantial holders in the company. I'm sure this can be seen as positive too, because the placement was probably oversubscribed and they have simply helped out with filling some of the extra demand.

Finally, I question the need for the placement to be done at both the time and the price that it was done at. The only committed funds at the moment from that placement are for a company in the USA that we still know nothing about.

I'm no expert on balance sheets, but I don't believe their debt position is over bearing at the moment. I wish they had gone into further debt to fund whatever expansion plans they have and then in 6 months time, when the SP would probably be substantially better than it is right now, do a placement then to pay off the debt. Less dillution and happier shareholders.

The idea of a SPP is something I have been against from the start, but realistically they are not relying on funds from that, it is just a chance to give current holders a chance to top up at the placement price. However, the record date for the SPP should have been the day it was announced.

I fully expect that there will be no further news regarding contracts, expansion etc. until the SPP closes this Friday. As much as I am a little frustrated at the moment, I think Lange would be happy with a SP of somewhere between 50 and 55. That way the true believers will send their money and hopefully the short term traders will decide it's not worth the effort.

It won't surprise me to see a steady stream of positive announcements once the SPP has closed, and with the quarterly report due in just over 2 weeks, I sure hope at some stage they are going to give a guidance for 2010. For anyone that has commsec, their EPS forecasts for 2010 have been downgraded several times recently, no doubt due to the dillution, but not having any information from the company regarding this certainly doesn't help.

Right now I wish I was more than just a measely options holder as I would love to be able to give Lange a grilling and find out more about the direction the company is heading, but instead I just have to hang tight and hope that he really is looking after the best interests of the shareholders.

The next 12 months should answer that query.