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29.5¢ quintis ltd

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119 Posts.

11/05/17

01:43

Post #: 24612375
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Originally posted by hottuna ↑

First of all, I'd like to say that for those people who have invested in QIN in good faith and feel like they have had the wool pulled over their eyes, I take no pleasure in your losses - quite the contrary. It's very sad that genuine investors have believed the hype from this company, because they definitely told a great story. Sadly, a story was all it was and whilst I have been short and have had a big payday today, over the time I have been short I have backed that up by explaining my reasons for being short on here - hopefully that means that people can accept I have been genuine in my opinions and have tried to caution people against that hype.

To those who have ramped the stock despite all the evidence that QIN was dodgy, I really hope you have and continue to own lots of it.

More constructively, I thought I'd lay out a potential path for QIN based on what I know, and which people can feel free to take or leave as they please.

We know that as at 31 Dec 2016, QIN had $89m in cash. We also know that every quarter, they are paying out $12m of cash in interest on their debt, whilst they have written puts over about $85m of the plantations. After today's disclosures, the exercise of those options appears much more likely.

Given the absence of significant revenues from the sale of Indian Sandalwood oil, QIN are utterly dependent on sales of plantations or cap raises for their continued survival. Clearly Plantation sales will have become more difficult given the lack of credibility of management and the career risk of investing in a product that has been identified publicly as fraudulent. In addition to this, it seems likely that ASIC will be keen to take a look at QIN's balance sheet and that the class action vultures will be circling over QIN's lack of disclosure.

So for me, the biggest question is how long QIN can survive in these circumstances. Frankly, I don't know - but what I do know is that QIN's cash position is likely to become critical sometime early in FY18.

Now perhaps Frank has his one last card to play with a bid backed by someone either incalculably daft or criminally non-existant, but given the lapse of time it seems he might have decided that discretion is the better part of valour. In either case, there's no credibility left in the company, and Glaucus can stand vindicated.

To wit:

View attachment 574260

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Yep, well done hottuna on your short...you acted on your thesis and have been handsomely rewarded.

So where does this leave bagholders like me? Yesterday's share price crash reflects company credibility being shot and the critical plantation sales period is occurring over the next 1 1/2 months so on 1 July we will see just how bad the damage is. Anyone looking at the chart can see that taking your lumps and moving on is probably the best idea for both $$ and also keeping your all-important trading mindset intact.

What am I personally doing?....keep in mind my entry price and trading profits on QIN are probably widely divergent to anyone on this board given how long I've owned it. My investment timeframe has always been to wait for the harvest ramp-up beyond 2020, with financial risk the catalyst for an exit from the stock. As such the next few months will be veeeery interesting.

QIN Price at posting: 60.0¢ Sentiment: Hold Disclosure: Held
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