The real cost to SHs is only a matter of trading styles elyk.For...

The real cost to SHs is only a matter of trading styles elyk.

For those that bought in at a low of 6c Mar 2009, and still hold, they are still at a 600+% profit.

For those that bought in at the high of 1.62 in Jan 2008 they are down 75%.

For all others, which is the majority, they are somewhere in between. Most would have had some turnover of a proportion of their shares in the mean time. Every trade means their exposure to the stock is either averaged up, down or eliminated.

Every time a share is bought or sold somebody is either making a profit, loss or accumulation but a transaction has to be made for this to happen.

The cost to a SH can only be measured if we buy or sell, otherwise the cost is just a figure blowing in the wind.

In the mean time the managers, voted in by the SHs, go about the business of running the company. Like Losty says, the SP is out of their hands.

Which brings us to the value of the company, which is the real cost to long term shareholders. With speculative stocks, provided the company is always working towards specific goals, this is always an intangible. Whether it is drilling for oil, developing new drugs etc. there will always be a market cap and a budget to work with. Capital is always necessary and companies always have to beg or borrow, unless they have something to sell. They need to have sound economic management skills which is why part of our research needs to be the managers we employ.

Because most companies are dynamic their VPS is always in flux. This is why you cannot compare the value of one company with another, although the emotional domino effect can bounce from one stock to another. Each company must be researched on its own merit.

I have noticed that when companies have their SPPs or CRs the price they set on these exercises are usually a steadier and create a resistance point. Prices usually hover in this range until something positive or negative happens to break this. At the moment we are waiting for something to happen with MEO, hopefully very positive.

All the time outside influences are for ever working for or against our investment. In 2008 not only did we have problems with Heron but the start of the GFC meant major SHs like Leheman and Xstrata dumped their stake in the company. Traders will always use these outside influences on a daily basis across the whole market, not just MEO.

The market always has a memory which leaves SHs spooked especially after an 80% drop in SP (2008 to 2009) no matter what the prospects of a company are. This brings out the ST traders who are able to play this nervousness and they have done this very well with MEO - and it still goes on today. The recent rise to 50c was just a technical spike, as pointed out by Stocktoe. A number of traders have said in this forum they love playing MEO for profit. We have all seen this going on for months so we can't complain - we can always join in like Naza did recently.

I think the present play in the stock is between ST traders and nervous retail holders. If inst. holders were dropping their bundle then we would have greater volumes. There are so many tricks traders use to make the a stock appear that 'someone is in the know'. It is usually smoke and mirrors.

So, where does this leave MEO? The SP went up to 80c in anticipation of the farmin ann. The fact that this did not happen increased the anxiety of SHs who were pounced on by the sharks. The CR set a price of 45c which is where the SP has hovered for some time. This has been helped by cappers and TA's who, rather than look at fundamentals, just play the market. The positive the CR has for SHs is that MEO is cashed up to move forward.

In the mean time we can only assume, on face of it, that the delay in the announcement is because MEO management are negotiating a deal that will improve the value of the Company for the shareholders. The CEO has stated that this is so and, until we see the final deal, we have to take his word for it.

Regulations decree that a company cannot mislead SHs. Whether a potential farminee can mislead our company is another matter. Preparation and signing of documents always take time, especially in two different countries for a major deal. Like HR said before going on walkabout, the wheels go even slower at this time of the year.

MEO will still be traded, albeit in lesser volumes, until we have some more news. Money will be made or lost depending which side of the fence you are. We must make sure that we keep thinking positively and lessen the chances of falling on the wrong side.

Personally I am still sitting on the fence watching it all unfold, so MEO has not been a cost to me. I have been given enough communication to justify my own long term investment/accumulation.

I may be naive and could be wrong but that is why it is only my opinion:>))