In case you all did not notice, the ECX shares has turned up in the Decline in share section in www.asx.com.au for the last few days at the top of the biggest fall. We also added up all the percentage losses since the anoouncement of the profit downgrade and guess what - more than 93% fall in th share price from $1.88 to $0.57 today.
Honestly speaking, We haven't seen such a big fall in share price in the ASX apart from mining shares in such a short time. Someone even mentioned ISD as an example. But we too bought and eventually sold ISD at a loss. But it certaintly did not fall 93% in such a short time. We trully believe the big falls are coming to an end and hopefully Green will be the colour of the ECX shares tomorrow. Always wonder why MMS, SGF or even SIQ did not make their moves now at such low prices. Who is selling at such big losses besides Pendal we have been wondering? We have bought the ECX shares at 87 cents, 75 cents and even 67 cents after reading all the investment bankers reports from Macquarie, Citi and Morgans. Obviously their clients who read their reports are also nursing hugh losses if theyhave followed their advice.
So where to from here. We have written to the company again. We were advised previously by the MD and Alan Dury of ECX that the Merger agreement does not allow ECX to shop for another bidder at least until 30th April. However, this does not stop another bidder making the offer. To arrest the further decline of the ECX shares, we intend to approach SG Fleet and SIQ to gauge their interest in ECX since we also hold shares in both companies. Our approach as we mentioned in our letter to ECX is that we are not acting on behalf of ECX but as investors in SGF and SIQ so see whether the current low share prices will interest them to make a bid since there are obviously synergistic and cost reduction benefits for merging with ECX. Of course we do not expect SGF or SIG to provide an answer to us straightaway as that will be against the trading rules to provide information that is not otherwise available in the market. But at least we can give a rough feeling about thier intentions. Obviously, the bid price may not be as attractive as before - but Heh! - even if it is close to $1.00 it is still better than the current low dismal share price. We will keep everyone posted if we have some response from either ECX, SGF or SIQ.
Cheerio, Isdhope
ECX Price at posting:
57.0¢ Sentiment: Buy Disclosure: Held
(20min delay)