My concern was not the short selling but that now that M&G have locked in there performance and bonuses for 2010 they will no longer be accumulating upwards in the short term. With the share issue M&G were provided a unique opporunity to lift (via accumulation) the value of their $2 sahre issue (reaching $4.60). The end of the reporting period hits and now they have made a total profit on this trade of 80% or so. Those numbers will be reported to investors and performance fees / bonuses will be paid on those reported amounts. The problem for us is that short term they no longer have that motivation to accumlate and may well let it languish for a few months. Once it drops they can start accumulating again from a lower price and get better value for their investors.
This is purely a theory of what could occur based on the current lack of support in the market. It is however just a theory that will easily be proven wrong if M&G lodge another substantial shareholder notice.
In any case for those in for the long haul it will merely be a speed hump on the CDU roller coaster. For those looking for a short term trade it may provide opportunities.
Interesting times.
I am the Iceman!
CDU Price at posting:
$4.32 Sentiment: Hold Disclosure: Held
