Hi all,As always, there are positives and negatives to be...

Hi all,

As always, there are positives and negatives to be gleamed from the latest announcement.

I'll start with the negatives.

1. NEGATIVE: in the short-term the SP will trade in the range that we have been used to for the past few months, i.e. 1.4c - 2c.

2. NEGATIVE: confirms announcements by MHL are easily leaked out and pump-and-dumps are to be expected.

3. NEGATIVE: share pool diluted.

4. POSITIVE: they will remain a going-concern for a bit longer, the risk that they will go bankrupt in the very short-term has been lessened.

5. POSITIVE: 'sophisticated investors' are willing to invest in this company, even if it is at a price of 1.4c. If they saw no prospects for MHL at all, they would not invest, even at 0.1c. But as Brantley has pointed out, if the shares are not escrowed, then it represents a nice short-term return for these sophisticated investors.

6. QUESTION: how does the capital raising, given its timing, affect the likelihood of the JV continuing?

6a. One view is that the capital raising, announced at this time, implies that the JV will not be going ahead. Because otherwise, why would they need this money if they'll be getting a truckload with the JV anyway? IMPLICATION: JV will not go ahead.

6b. Another view is that the money from the capital raising will be used for other projects, and since the JV will only provide cash for the K-stan project, money is needed for its other projects. IMPLICATION: JV will still go ahead.

Overall, I am personally still bullish about MHL, but with a very long-term view (3 to 5 years), and of course there is a lot (and I emphasise A LOT) of risk involved with MHL. So if you can't afford to lose it all, put it elsewhere. I agree wholeheartedly with Brantley's sentiments, but I guess personally I am a more risk-tolerant investor, and hence I still hold.

As always, please do your own research.

DISCLOSURE: I dropped around 1m on Friday and bought back in at 1.8c today. As another poster pointed out, MHL is rather good for a trade in the sense that it has rather predictable swings.