That may well be the case.
But professional funds allocate capital to a diverse range of assets - could be up to 10-20 positions they have in start up companies. Most likely based on historical probability of success in companies of the same sector.
A lot of retail investors will risk weight incorrectly and hence the noise we hear on this forum. The only thing you have in your control is how much you can loose - call it risk capital.
Without actually seeing the contracts, the implicit details, the figures quoted and terminology in the ASX releases are perhaps more misread than people being mislead. They may well have "5 year" "multi year exclusive agreements" but lets delve into the definition, assumed or otherwise of those terms. Without the specific details, out clauses, caveats and such, perhaps readers have assumed to much. Theses, agreements or contracts shall we say, could well be legitimate and within the confines of full disclosure. Termination rights to the contracts have never been disclosed and thus, one could perhaps assume, isn't then a breach of continuous disclosure. Is it honest, good corporate governance and a display of high integrity - hell no!
Now I'm not taking sides here, I do own a small holding of GSW (as previously disclosed) but it's worth taking a serious view of the terminology used in the releases. One other thing is the line up with forecast projected revenues happen to line up with the release of the director shares under escrow.......now that may be coincidence or not, remains to be seen.
The puzzling aspect is, if it's true (and I'm not saying it is) I can't reconcile why the directors (collectively or otherwise) would risk it.........still I've always struggled with with Econ 101 and the specific assumption "People act rationally"
I'll leave it there folks.
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