What is painfully clear is that the current valuation has and will continue to change. The days of BAL being in the double dollar digits are unfortunately over IMO.
It would appear that the writing has been on the wall in the boardroom for a while but appears to not have been allegedly disclosed by Management to shareholders and the market hence the current suspension from trading.
Disclosure rules are there to protect shareholders and shareholders Capital. As far back as July 16 they were listed as overvalued against their peers.
http://www.capitalcube.com/blog/index.php/bellamys-australia-ltd-value-analysis-asxbal-july-18-2016/
Shareholders have lost 500million dollars in the recent drop and the legal sharks are circling.
"The class action follows a BusinessDay report on Saturday, which revealed that Bellamy's market share in Australia collapsed between April and October this year. The confidential Aztec data, showing supermarket and pharmacy sales, revealed that Bellamy's market share plunged from 25 per cent of the domestic infant formula sales in April to just 12 per cent by October. In dollar terms, Bellamy's went from earning one in every four dollars spent on baby formula in the country to just one in nine.
Despite the massive decline, Bellamy's failed to issue a single update to the market or investors that warned of issues that may impact the company's bottom line."
http://www.smh.com.au/business/reta...500-million-share-plunge-20161214-gtau5x.html
Watching from the sidelines for a long while, as i posted a long while ago for me BAL always felt like another ABC learning centre fiasco. I hope for current shareholders sake it is not.
The other telling issue is where BAL sources its products from and if you were to read their tin and website you would think it is all sourced from within Australia, is all organic and is all made in Australia. Whilst some of that is true.
"Bellamy's sources much of its products from abroad, given the small volume of organic milk and dairy products produced within Australia, which has also raised doubts about its business model.
Given BAL are basically the middlemen with no significant assets the business model is primarily a volume and price based one, and is very susceptiple to changes in demand. IMO Chinese are in fact now trying to eliminate the middle men, going direct and getting their product cheaper, you cant blame them.
If earnings drop valuation follows.
Beyond its inventories, the company has negligible assets "so if earnings continue to deteriorate" there won't be much else to support its valuation, Citi warned
In addition, if the market believes that Management have dropped the ball they wont jump back in until their is a change in management given how much of their capital has been wiped.
They need to quickly bring some certainty back into the business to sustain the SP. Market hates uncertainty.
GLTA 
