latest thoughts

A few thoughts while trying to digest this market release.....


The directors have made a release to the market, that the money that would be raised would be used to fund expansion... not to continue operations. ie they have released the statement that the cash is not going to be used to bail out the current cash poor situation (if this is the situation exists)........ should they be not truthful in this statement, they would open themselves up to litigation. Directors insurance against litigation generally would run to the tune of $20m per director. This would indeed cover the losses sustained by shareholders over this issue plus some for legal costs.


I believe that some people in the know have been trading (or indeed dumping) the shares because they knew about the capital raising. This is insider trading, and would need to be investigated. Small trader would be hard to catch, but top 20 shareholders or 100 share holders who change large volumes shares should be scrutinised, charged and jailed. We all (as shareholders) feel shafted that there is market sensitive news from which people have been trading the stock. The company did not release this to the market, when people knew. We all want a level playing field. The more concerning fact is that is there other information that people are aware of that is bringing down the company's share price, that we are not aware of! The ASX must ask the board to release all market sensitive infomation, especially the operational figures upon which the decision to raise capital was made.

If the share price was 80c and the company made this announcement, then we would all be rejoicing and saying how wonderful it is. But the price is 25c (down from 50c) and hence we are all skeptical.

Optimistically speaking, should the company be trading well and the board has been approached by another larger company (like a power provider), who wish to take a stake then issueing 50m shares which will be allocated to that holder at 90%+ of the share price, then this would be a favourable position.



anyway

some thoughts

IJ