The Market Judges

So tomorrow is D-Day for AJX

Well maybe not tomorrow exactly, but the SP that AJX settles on over the coming days will tell us whether AJX survives another day or not.

If it settles significantly above 6c, then there will be reason to participate in the CR. The CR will be mostly filled as there are opportunities to buy more than your allocation if not everyone subscribes. AJX will have the cash to remove the debt and WC options enough to allow them time to grow their PCM sales. I still don't think their market is big enough to make this a decent investment, but for those already invested, it is a far sight better than the next two outcomes.

If it settles close 6c the CR will likely not be filled entirely, so the debts will persist and AJX will have cash flow problems for some time. There's still a good chance that the company will pass to the creditors who will seek to sell it on to ICL to recoup some of their losses.

If it settles below 6c it is as good as certain that the company won't be lasting much longer in its present form. There will be no incentive for anyone to participate. AJX won't be able to pay their debt, nor get the WC to sell their product at sustainable levels. Creditors will take all that remains.

Where it settles depends on how much the market values the company. Nothing has changed since the last reports came out, except management's admission that they are in trouble, but that was evident anyway, admission or not.

AJX plus $15 mil is certainly worth more than AJX now. Post CR, assuming full take-up, the company will have the same market cap as today if it trades at 6c. But it was also overvalued going into the CR, that will be evident from the lost capital of present holders. But its not certain that it was $15 mil overvalued.