What are you talking about, this is a forum on Blue Sky and I am sharing news articles that are in the Fin Review. The commentary and the headline are directly from the Fin and not everybody here would get them.
In terms of the validity of the the water fund being a ponzi scheme, who knows, what I do know is that when Glaucus first issued their report they called it all lies, here we are what 10 weeks later, and all of the commentary on Blue Sky from Glaucus turns out to be true (well most of it). The commentary from the fund managers saying that with Blue Sky being the dominant buyer of water rights, they are creating their own inflated market, which in effect operates like a ponzi scheme could actually be fair, who knows. I didn't draw any actual conclusions, just shared the commentary from the article.
In terms of my motivation, when you go thru previous corporate collapse, there are way too many people who complain, I didn't hear about that, I didn't realize that. Even here, people were completely unaware even after the company admitted it, that they were declaring paper profits on inflated valuations. Look at Big Un (ASX:BIG), probably going to turn out it was just a massive 1billion dollar fraud. Blue Sky could go the same way.
Any day they could suspend trading, and then 6 months later, collapse.
Alternatively they could clean up their act, leverage the network of people who sell their financial products and turn this into another $10 share.
In terms of my motivation, I'm following because if they can clean up their act, sure, I'll buy back in if the price is right, my last valuation point prior to the last market update was $1.50, now, hmm, no so much, too much cash burn for me, I had previously thought that a capital raise was a possibility, but the more I look at the company, I see too many issues.
I actually sat down last night and looked at their options moving forward as this will determine if there is a buy price for me. However I cannot see a path for them to actually continue in their current strategy, if the cash burn stays the same way. To my mind the Blue Sky entity is dead. You will struggle to do a capital raise with a shareholder class action over your head, which means that your ability to grow the company is basically gone, we will not know what the real state of the company is until August, assuming its still here. So what to do?...... Looking at all the options, I can see no other path forward (if the cash position is what i think it is), other than the sale of the underlying funds management business. Capital raise is off the cards, takeover is off the cards, organic growth thru profits is off the cards. So sell the underlying business to a new entity and start again with a new name new shareholders, new capital base, etc. Run it private for 2 or 3 years and re-float. The only question is, does that happen before it runs out of cash and they start to cannibalize the business or after. So I will sit back, continue to observe, see if any of my assumptions change and in August after the annual report, review.
Watch this space people, and be cautious with your capital, as if this company does go into a trading halt, there is a far greater chance that it doesn't come out and you get 10 to 30cents a share or nothing than there is that this will ever be $14 again.
In terms of my obsession, this is all just a learning process for us all in life and you learn the most from the failures than you do from the successes. Every day. Research, Decide, Review and then repeat. And for me Blue Sky, Big Un and RFG are some of the best learning experiences in the market today. I have held Blue Sky in the past, but not today.
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