As I write and despite what others want you to believe the SP continues to be under pressure.
Also despite what others want you to believe the RCPS debarkle is having a big effect on the SP in more ways than one so I think it is quite relevant to dig a bit deeper.
Not long ago the board ever so kindly issued 513m shares at 2.2 cps to themselves and associates......SP at the time was 17 cps.
This conversion represented a 50% increase to dilution on the roughly 1b shares on offer at the time.........so who got them.
Well we know the directors all got them about 15 m(need to check final amount) between them and since the announcement we have only seen 1 SH notice and that was from Asian dragon who it appears picked up about 60m of them.....but this is debatable based on their trading of the shares.
This leaves a massive 450m shares or roughly 28% of the shares on issue unaccounted for.
Certainly no one new has gone over the 5% threshold as you have seen no SH notice.
What this tells me is the RCPS issued at 2.2 cps have gone to a very broad range of investors.......who more than likely have a good relationship with board members hence the board made many poeple, closer to them than myself and most others, very happy by converting the RCPS.
Unfortunately for many others it meant major dilution and a sell down of a huge part of the company for 10 cents in the $1
Also unfortunately it has given instant 500-600% gains to a wide range of investors, good for them, but, IMHO, this is one of the reasons why you are still seeing a sell down, not withstanding other issues surrounding the company.
Well if I had been lucky enough to know the right poeple and got my hands on options that offered 500-600% profits when they were converted I would certainly sell at least some.....probably more than some.
Obviously it is not just the price the RCPS were converted at but the fact that the company did not have to convert them as the company had a redeemable right on them through to February next year.
BRL Price at posting:
11.5¢ Sentiment: None Disclosure: Not Held
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