"OK....but tell me then why the market prefers MBT to SBI?"
Hmm - thats the million dollar question - why are some stocks favoured over others, when they both have pretty much the same setup, and are influenced by the same market and external conditions?
I don't know, maybe MBT have better analyst briefings, maybe they have holders who have larger stocks with longer term views, maybe their shareholders don't read these boards so much!
The bottom line is that SBI were forthright in their announcement regarding the plant and their intentions as soon as the board made the decision to pause production. In my mind, that is the right and only ethical decision to make. Thats why the price dropped so dramatically. If you look at the price of SBI now, it is basically book value - serious take over target at this price.
Who knows what will happen in the medium term? Both companies are tied to the price of PO. MBT (from memory) raised another ~65m in capital, SBI have 10m in the bank (give or take). They also have an agreed offtake deal for 100% of all production. So as soon as price drops, they're up and running. (IF the price drops - if it continues to rise, then we're all up the creek!)
And if Jatropha is the future, I think we've all done our dough!
Jamo
~~ My thoughts above are just that, do your own research! ~~
MBT Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
