My only explanation for the price drop has been because on the day of our reserves announcement, JP Morgan put out an underweight recommendation for REX and a share valuation for 56c.
Previously they had advised their clients that Rex was worth $1+ only a few months ago (hint- don't ever use JP Morgan). The market is funny with broker recommendations. You always see their recommendations much higher then the actual price, they usually never hit them. but has soon as a broker has a target BELOW the price. Bam, they dive. Lynas is a great example of that, another is our mate OZ Minerals ( a broker report pushed the stock down 10%+ in one day!).
So where to from here? Well according to old mate JP Morgan our problem is funding, which according to the CO should be sorted in the next 6 months.
For mine there are a few things which are disheartening me right now. 1st of, this price drop is going to make the funding options much much harder. Why hasn't any of the big shareholders offered some support? Why aren't the directors buying on market?
& just on that why are our directors paid so much? nearly $3m+ per year. Now I've gone through some larger companies Q'lies & i can't find any that have directors fee's anywhere near as much as ours (on a cash basis) ? What are they doing? Shareprice has tanked, nothing seems to be going right?
The other is why haven't they looked at a smaller scale operation? big isn't always better. bring down the CAPEX I think is what the market is saying.
RXM Price at posting:
56.5¢ Sentiment: Hold Disclosure: Held
