re: News: Forge Group's Roy Hill contract to ...
You would have to have been a complete idiot to have shorted this stock in circumstances where:
1. prior to its liquidity disaster, FGE had a $1 billion plus order book and had also announced that it had been awarded the Roy Hill contract worth a further $800 million plus; and
2. its liquidity problems were improved by the ANZ loan and agreement to amend FGE's loan covenants.
Of course, FGE carries (and is likely to carry for some time yet) more than average risk but, in my view, simply shorting the stock was the superficial easy trade and accordingly not the right strategy to profit from that risk, since the initial selling was nothing short of irrational, making the prospect of a subsequent rebound and short squeeze very high.
FGE Price at posting:
$1.62 Sentiment: Hold Disclosure: Held
