why is share price so low?, page-20

Some thoughts to consider....

Over the four weeks prior to the Takeover offer, there was a volume of 26 million shares traded. During this time the SP went from 20.5 to 39 cents ... nearly 100% gains. Then the offer was announced. So even coming back to 42.5 now, this is still quite a recovery.

Now we all know there was some serious "insider trading" going during those 4 weeks!!! For example the previous 4 weeks to that saw a miserly 10.2 million shares traded in BMN, the whole sector was stuffed, and BMN was trading at historical lows .... SUDDENLY sustained buying comes in ... a 160% rise in volume & a 95% gain in the SP. Hello!!! Something was happening here!

Then we have the takeover announced, BMN spikes to 52, and then solid selling to lower the SP to current levels. Interesting that today after huge gains on NY & with the XAO up 70 points ... BMN sold down!!

Now people, use some lateral thinking please....
FACT 1 - There WAS insider trading during the previous 4 weeks
FACT 2 - With 160% higher volume "someone" picked up a bucket load of cheap shares.

Now ask yourself ... what was their motive? Purely to make a few dollars? Profit is always involved, I know - But in this case it becomes obvious that there is a dual reason.

Here is my take. We can assume that Hanlong or at least entities covering for Hanlong were the main buyers during the preceding 4 weeks. Then the announcement! The SP suddenly spikes up, and "Hanlong" now have possibly anything up to 20 million shares to begin selling. They do so carefully at opportune times selling into the bid, constantly creating selling pressure and pushing the SP down. Even today we see bursts of selling and some queue stacking to create an impression of weakness.

RESULT: They and/or their agents make a tidy profits for their efforts, but more importantly, they get to keep the SP flat, create doubts, and build up acceptancy from shareholders that 60 cents is not such a bad deal.

So what do investors do? Well it is a "no-brainer" as far as I am concerned!
1] If the offer goes ahead, we have an easy 50% gain from here.
2] If it fails then I think that there is a high probability of a second improved offer.

In the meantime the markets are slowly steadying. We have seen the toxic U sector slowly get some buyers move in with some SP improvements. People are settling down after the Fukushima scare. And in a few months the 60 cents offer might not even be in the ball park.

Either way IMO, BMN is an easy HOLD at these prices, and a BUY on any weakness. Hanlong & agents will soon run out of shares to depress the SP, and the weight of the market will begin to force BMN up to that 50 cents mark & beyond.

We have a very interesting few months ahead.