AXP suspension played into Market Makers hands !
Little picture: the incompetence of the ASX in the 2 month closure for AXP trade has resulted in unprecedented market manipulation and profiteering by OTC MMs.
Big Picture: ownership of the company is being transferred to US hands, extension of this may make it unviable for AXP to remain listed on the ASX.
The little picture has been well discussed, but in summary; OTC MMs have been selling stock that they don’t own in the US, effectively as a promissory note, and by arbitrage they have traditionally balanced their books from OZ taking a 10-15% premium. The suspension for 2 months resulted in a deficit or short on their books of well in excess of 1 billion, approximately a quarter of shares on issue. MMs sold these shares for estimated average price 2.4 cents OZ. By dumping 210M shares on OTC market night before reopening OZ market, they pushed the price down some 40% on the OTC, in so doing reducing the expectation price on opening here on Monday. MMs now happily Hoover up shares at say 1.2-1.4 cents making an unprecedented cent or so per share or 80%. Good business to be in, thanks ASX !
The Big Picture: both AXP and AUNXF shares are only held on one Registry (Boardroom here in OZ), and shares on issue for the company in total is a combination of those shares.
ie. prior to recent options, AXP + AUNXF shares = 4.8 billion
The Company Secretary, Robert Lees, estimated that prior to the suspension 500 million were AUNXF (and I think that is seriously conservative looking at the levels and shorts of trade in the month prior)
MMs deficit on the OTC during suspension was conservatively 1.2 Billion.
This share deficit is being bought up daily (maybe 400-500M now) since Monday.
MMs are also adding to this deficit on their market, 69M on Monday nights trade, (but buying here faster than they sell there)
If we add up these figures: 500+1200+69 +growing daily average; within a few weeks the majority of the Company could easily be trading on the OTC in US hands.
At this point, the Company would really have to consider the viability of remaining on the ASX. The Company sees the ASX as an impediment to their growth, they hate the heavy handed disciplinary regulation and believe the reasons for their suspension were largely unfounded. Company assets and operational headquarters are all in the States, only thing that remains here is admin and a very difficult exchange that conversely has issues with them too.
I believe they will follow the likes of ISignthis and move elsewhere with a finger pointed up behind !
Another Australian asset is in the process of being sold !
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