One of the reasons for buying a company's stock is the potential...

One of the reasons for buying a company's stock is the potential for the company to prosper. One of the reasons for a company to be listed in disallowed is the ability to raise money to fund projects and hopefully with good financial and project management, to bring the projects to fruitions. Investors risking their capitals investing in projects. It is the risks that investors are generally prepared to take. Hence regulations are enforced requiring listed public companies to comply with disclosures and other legal obligations. A regulatory system to prevent scams and fly by night companies.

The ways the take over bids were conducted are unconscionable and in a predatory manner. Prior to this episode, McGrath Nicole, had been previously engaged by both NXS and SGH. Therefore it may not be entirely appropriate for McGrath Nicole to be appointed as the administrator. Though NXS went into voluntary administration, its subsidiaries did not. Hence it is safe to state that the subsidiaries have not been subject to financial scrutiny. SGH would not have invested in NXS and provide NXS with a line of credit if SGH does not see any long term and potential value in NXS.

It is also important to note that NXS has been illiquid but not insolvent.

For many years NXS has raised equity through share placements, investors are willing to wait and risk their capitals. What has happened is not recognising many years of investors supporting NXS, instead of script swap, SGH secured the creditors consent and left shareholders with 2 cents or nothing holding shareholders in ransom. There is no evident that this will not happen again to other companies, this episode will inevitably adversely affect public confidence in the Australian stock market.