Nope. Never traded this stock but I would have been shorting at...

Nope. Never traded this stock but I would have been shorting at the 55c area for reasons discussed below if it had come across my screen at the time the declines started.

Yes I somewhat agree and I hope they do over the long term.

In saying this, you cannot dismiss the stock compensation as it is an integral expense in this business structure and it is an expense that is tied relative to a declining All Ords which is hostage to commodity prices.

And it looks like the expenses for this year are going to be huge. If they expense the stock compensation properly they will be paying the 1.5c - 2c dividend out of capital raised.

My 'dirty' calculation for performance and management fees came to $17.27M. On latest guidance as I understand the company was hitting $1.3M cumulative profit Nov 2015 after receiving the capital raised at the end of August 2015. My assumption is that the $1.3M does not include adjustments for performance fees but even if this assumption is incorrect the share price in Nov was around the 33 cent mark so the performance fees were low.

Let's even assume they make $1M profit per month until a performance fee calculation, that still will not cover the expenses at current levels.

BFC is on track to make a loss and the Investment Manager is on track to receive a huge payout in my opinion. They will likely try to hide the performance compensation on the statements though because there are valid tactics to do this.

This theory explains why in early Feb the stock price fell from the 55c area because a VWAP performance fee calculation is coming later this month (six months from stock listing August 28).

I still think the stock still needs to fall to lower to the low 40's before the VWAP calculation to get the performance fee in a position that is more representable of the underlying asset performance.

Hence my bearish attitude.

This is all my theory but it answers the thread question regarding why the sharp decline in stock price.

I want to make absolutely clear that I do not completely dislike this stock in the long term. I think what the business is designed to do is very beneficial to Chinese consumers. I am merely providing another theory which I believe is accurate for the institutional sell off. As I said, this actually benefits the long term prospects of the company because this performance fee completely deviates from underlying asset performance and this is what I believe was their intention.