Dapper, I can only answer your question from a commonsense point of view. The trading of shares is a demand and supply situation.the main factors that affect this equation are;
1.number of shares on issue 2.tightness of the register 3.intentions of buyer and seller at the time of sale 4.economic conditions at that time. So as a way of illustration,20 million shares on issue,60% held by the top 20,ie12 million leaving 8 million for the remainder and lets say the top 20 are long term shareholders and will not sell their shares for 3-5 years,thus greatly reducing the pool of sellers onany one day and lets say we have boom conditions so the buyers dominate on those days and the price goes up sustainable over a period.
So relating it to Key; 1.No of shares. I have analysed the 2011 and 2012 annual reports,but really the most relevent data would be the current data while the cyrene is in progress.So the 2011 share register shows the top 20 holding 97 million shares and 45percent of the register and 2012and if you take out empire oil and add no21 on the register it would be 128.5 million for 28.5 percent..So the register has become less tightly held and there is only 6 of the 2011 investors on the 2012 holding 36 million meaning it is almost totally new..the composition has changed to,more Pty Ltd companies at the top,less individuals and super funds.This tells me that more than likely they were the sophisicated shareholders coming in at 2.8 cents. 2.Tightness of Register So the top 20,28.5 percent is not tight and is made up 92 million of new shareholders.Not Ideal! 3.Intentions of buyer and seller at the time of sale This the debating point.There is an absence of buyers,which I contend is market conditions ie a bear market in high risk stocks and oil drilling is the ultimate high risk.buyers only see the downside and are staying away despite the major reservoir still not drilled! The sophisticated investors who I think are the sellers I would contend thought the price would go up prior to drilling and it did not happen and they are setting a price as close as they can to 2.8 centsYou would only need maybe 2 of them with 15 million shares hitting the 2.7 cents. In relation to the sellers,the sophisicated or others they are mostly only interested in the a short term return on their money especially where oil is concerned.So those that received the shares at 2.8 were probably happy with 3.5 but it never got there.Management and success in a minnow oil and gas company takes years to build up,to develop a track record, and the currentceo needs develop a track record so that a long term shareholders following develops like Eric from Buru. Eric was probably thought of as a crackpot 2 years ago in some circles for following his dream and trying to crack the Canning and it needs luck and the ungani result was not expected.So luck plays a part. 4.Market conditions at the time. As said bearish for buyers so none around
Anyway thats my view.It is certainly not the no 1 shareholder selling or the directors as they have mostly incentive options
KEY Price at posting:
2.6¢ Sentiment: LT Buy Disclosure: Held
(20min delay)
