I wouldn't want to be buying or holding at the moment, too much risk of a big loss if CMQ loses the case.
If they win however, I think it will become an excellent trading stock in the short term.
Once the risk of immediate liquidation is removed, the bondholders can't do anything until March next year, when they can once again demand repayment of their bonds and there is nothing CMQ can do to stop them. It now looks like the have got cash burn down enough to see them to at least that time, so there is very little possibility of bad news until then.
If, by some miracle, they manage to pull a rabbit out of the hat and actually get some sales, or some developments happening with PCAS or other another partner, in fact even the faintest whiff of any news that might be even vaguely positive, the shareprice is likely to rocket up.
So I reckon it will be a good bet over the next 12 months, but I'm going to wait on the outcome of the case. I'd rather have to pay 33c after the decision, make a smaller percentage return, and know I'm safe rather than paying 22c now for a slightly bigger return, versus possible total loss.
If they win, the company only has 12 months to prove its worth. If things still look the same as now in regards to sales, still struggling to find a partner etc. the bond holders will demand repayment and CMQ will be equally unable to raise the money as they are now, and liquidation will be a certainty. They have just 12 months to convince the bondholders that they should convert their bonds, or get operations to a standard that will persuade investors that it is worth putting more money in.
Given the past track record, I don't hold much hope that they can achieve this in just 12 months. But, with a few more regulatory approvals.... who knows? Either way, with each new announcement of an approval (even if next to no sales follow, as has been the case everywhere else) the shareprice is likely to leap up and we can profit handsomely in the short term
Add to My Watchlist
What is My Watchlist?