I do hope it recovers, but I think you have your analysis wrong. In the summer break time to do analysis and think clearly while everything at standstill. Markets won't have much volume until mid-Jan while Australia at the beach. So its time to think.
IMO, these are some other issues need to analyse and get own comfort.
* Leading known shorter (probably others bigger, but not so public) questions historic profit growth and analyses SGH cash vs accounting in a powerful analysis copy I posted earlier. So far nobody can rebut. This analysis goes to core valuation and trust.
* Quindell has degree of toxicity for several reasons. It affects confidence in SGH management they paid top dollar for Quindell. Maybe the Quindell business will come good, but UK followers say otherwise. And already SGH saying results are below expectations.
* Debt covenants tied to book values. Any goodwill write down may test covenants. More than one analyst has warned of possible need for an emergency CR of course at likely at discount to market.
* White collar staff incentives and the firm's reputation affected by last 9 months share price collapse. This has a feedback loop.
* Class action is an unknown, but it could via legal discovery uncover governance issues that add fuel to above. Especially when leading shorter published analysis that in effect questions the core accounts.
* Argument all along law firms not suited to listing. SGH seemed to disprove this over years. But this argument comes into further prominence now.
* Trust from analysts and big end town at a low ebb. Maybe it will bounce back but, once broken, trust hard to restore.
Good luck to those with faith, but the above points are the kind of things need to get comfort with, IMO, starting with the VGI analysis, not just: hope new CFO is good, and ASIC finds nothing more... kind of thinking.
SGH Price at posting:
89.5¢ Sentiment: Sell Disclosure: Not Held
