Ann: ECQ Exercises Opitons to Acquire Cynata Inc , page-43

re: Ann: ECQ Exercises Opitons to Acquire Cyn... It is telling that Massey (and others) have been selling a few million heads, I don't think they would be doing that if they think the stock price is going to go up in the short term.

And I agree, I think this will pull back to about 1.5c or 1.6c before the trading halt for the consolidation.

Then it will list post consolidation at about 30c to 32c, and initially pull back to about 25 cents, which is near the price of a new IPO, and is how they should have organised the consolidation deal to begin with.

So why didn't they?

It would appear that the directors got white line fever, they got greedy and over confident, and it seems they may have been thinking about their own bank balances first and foremost.

So as you can see, even the most experienced directors, bought on board to do the deals and ramp her up, can be undone by excessive mammon and hubrus.

Quite clearly, the market is telling the directors this, and I expect will continue to do so, but I am not that sure they will listen.

The market says that most IPOs and relistings do so at the 20c to 25c range, and so if these directors get greedy and shoot for 40c then the markets will reign them in (quite naturally), and bring them back into line (though unfortunately, this ususally happens at the expense of retail shareholders, not at the director's expense).

Regeneus, the other pure Stem Cell company on the ASX, listed last week at 25 cents, and it is more advanced than Cynata, so it stands to reason that the experienced market watchers (and makers) will look at the Cynata consolidation and simply send it back to the Regeneus price of near 25c (simply because it has no history, or runs on the board yet). This is not rocket science, it is simple logic. Cynata is being made to begin at the starting gate, like all the other companies do.

Good folks like Massey (who's posts I always enjoy) can probably see this now, hence the selling.

My advice to investors now, is to wait and buy post consolidation, and aim for an entry somewhere around the 25c mark, because you will find that Cynata and Regeneus will track each other closely for a time.

I have to say though, that I am surprised at the lack of feel these experienced directors from ISN have for the logic and nuances of the market, I would have expected more from them.

However, if you talk to the folks at Cynata, you can get some understanding of why things happened this way.

The two men from ISN were bought on line to do a job, and then to move on. They will stay for 18 months or so, after which the current MD/CEO of Cynata will return to the job.

I think both Cynata and Regeneus have a good future, if they can successfully prove up stem cell cures for humans in a reasonable time frame. I want the Regeneus arthritis treatment to work as successfully on humans as it already has on animals (dogs and cats), because I intend at some stage to have my old knees done.

Cynata will be slightly different, because if successful, they will try and license their technology as a manufacturer, along an industrial manufacturing type of business model (at least in part).

Hang in there, 2014 should be an interesting, and hopefully successful year for these guys (and us).

Cheers,

Gw

A census taker once tried to test me.
I ate his liver with some Fava beans and a nice Chianti.
(Anthony Hopkins - Silence of the Lambs)