It was fun on the way up ... but Babcock & Brown is shaping up...

It was fun on the way up ... but Babcock & Brown is shaping up as a pretty quick round trip. The stock is getting smashed for the sixth day on the trot and in the absence of an intrepid white knight riding to his rescue Phil Green and his troops are locked into a vicious death spiral.

Green is likely to stand aside this week, not that it would make much difference now. Responding to speculation of his imminent departure, a spokeswoman told BusinesDay, "no comment". "No comment" is a fairly unique response to the question, "is your chief executive about to depart?"

Shares in the besieged investment bank have now been shellacked almost 40% in six days. As Babcock controls some terrific assets, albeit with a terrifying degree of debt, the sheer ferocity of the share price plunge suggests this will almost certainly be another de facto work-out situation.

It is Allcoesque. The banks are likely to appoint an insolvency specialist to keep a watch on their investment to make sure the interest payments keep coming and to try to stabilise the stock price so once again, one day, Babcock can put its hand out for more equity.

Right now, equity is a long-shot. The crux of the problem is that Babcock is a confidence game and management has lost the confidence of the market. The debacle over the Babcock & Brown Power refinancing a couple of months ago - where analysts say they were misled - sharply eroded trust, as did the belated confession to an earnings downgrade last week.

How could Green be sticking to his $750 million earnings forecast one day then suddenly be conceding first-half profit could fall between 25% and 40%? Why so late in the piece?