Schadenfreude and Binary Outcomes

Sschadenfreude, " pleasure derived by someone from another person's misfortune." It's an ugly, ugly trait but common enough the Germans invented a word for it. Got to love the German' s efficiency, so many words to describe what it takes a sentence to say in English.

So is this schadenfreude real or perceived? Our misfortune is a drawn out project sale negotiation with a binary outcome that attracts few buyers. Who wants to out and out gamble, it's risky and uncomfortable. As time drags on it's not surprising some want to take risk off the table. Plenty of placement clients in the last 39c raise would be thinking wtf have they got themselves in for, better sell some now in case the project sale fails. Fair enough, each holder has their own pain threshold and stops. Buyers are few and easily overwhelmed by any serious seller. Stops get hit.

Volume is low however and this is not a story to be traded. It's an uncomfortable holding pattern pending a deal or no deal. Everybody here knows it, I have been saying so for 9 months since jumping in. Binary outcome, heads or tails, win or lose. It was always a gamble.

What is the gamble now and how are things standing? Time always works against confidence and in a news vacuum negotiations are still ongoing. Fear as time drags and no deal or TO is made is understandable, not helped by management who was guiding a decision by December. I'm not surprised that the time frame is extending into the new year, complicated due diligence and negotiations on a large amount of money is a recipe for back and forths that take a lot longer than expected. Otherwise only the gamble payoff has imporved, from the updated BFS when everybody knew SFX still had to find a partner, the 39c CR to remove the con note risk, to 30c as time and gravity does it's thing.

Below 30c the payoff on the gamble is obviously higher and will get higher still if it falls further. Regardless where you bought in it was always a gamble and medium term play, we all know that. Uncertainty and a falling share price is always tough, especially when ambulance chasers want to dance on our grave. My take is that negotiations are well and truly ongoing and we are a long way from dead. One might expect a takeover instead at some point but just because the price is being walked down on very little volume doesn't mean the major holders would accept a lowball offer. Liquidity and an exit for those lost patience will come with a deal and price discovery and not before.

Good luck