That is really a pretty weak defence of their company. There are a couple of things worth responding to:
- I am not sure what journalist he is referring to that has caused distress. Anyway, how does he know that what sort of business experience people have; and for what its worth, the only 'billion' $ aspect of CIY is its debt! CIY is not even a half a billion $ company.
- The AFR article was nothing more than a regurgitation of their announcement to market yesterday. If CIY move ahead with the MFS purchase it will be a massive blow to whatever reputation CIY have left, and do nothing more than tie them closer in people's minds to the MFS debacle. This will = more redemptions.
- Re those people that put money in at 9.95% (their highest interest rate on offer), these people are going to want a higher return in the future for their money, given the risk associated with the environment that they operate in. This will = higher costs of funds for the company = less profit in the future. As for them not losing their money - well, you can only really say this when all of the investors have been paid back. I was recently told a story of someone that put in a redemption notice, and was then given "every excuse under the sun as to why I can't have my money back immediately".
- As for not being able to put up repeat stories to market, that is exactly the point, they have said they will come out with a 15% profit forecast - but no one believes them, nor cares. They are toast.
- As for their beloved leader, who 'even sometimes works here at night', I agree, he seems to be somewhat highly regarded in the market; but, so was David Coe at one stage. Its not a personal attack on these people, it is just the market forces that will take things from here.
I will hold my short, because I believe it is a simply a matter of when - not if.
Good luck.
Again, only a personal opinion.
CIY Price at posting:
0.0¢ Sentiment: ST Sell Disclosure: Not Held
