This is a good deal for the company - takes care of all the capital requirements and clears out the outstanding loans! I think we could have seen this coming - Only 3 years ago = 26 May 2006 they did a big CR to the value of $186 Million. * Shareholders were able to buy at 0.30 cents a share 4 shares for every 5 held.
Short term it effected the share price in a big way went from the mid 0.40's to a low of 0.25 cents or so. I would expect a similar situation to play out over the next few weeks - You may ask why? some thoughts -
* short selling will come in to play! * Margin loans will come under pressure - therefore forcing selling and lower share price * June normally a down month for stocks - * selling pressure due to above and also shareholders need to finance their entitlement * Dow Jones -PanAust Target Cut To 30c From 40c By Credit Suiss. * Others will follow Credit Suiss!
For those that have taken profits since the last CR will be a great position to pick up move stock at lower prices!
Long term this really secures PAN's future and eventually the share price and their market cap will increase over time!
My strategy will be to accumulate this stock on the lows - how low? we will just have to wait and see - It may go under the 0.28 cent level - alot of stocks seem to come down to their issue price and under in some cases! Pan came under their last issue by 0.01 cent - I pick some stock up at 0.145 cents at the time
Short term this would have to be a sell - but long term a BUY
Cheers
PNA Price at posting:
37.4¢ Sentiment: ST Sell Disclosure: Held
