target price > $5.10 - $5.75, page-37

Hahndoe, the idea that you should only list to people who hold shares, and by that extension, take a positive view on the share price, is beyond funny. Read all of the commentary and form your own view. Go and have a look at the ASX:BIG forums and see the comments from people who have probably lost a fortune that are now saying hey, so for all of the abuse we sprouted towards people who said this was a dud.

My view for the sake of clarity is that this company is at a cross roads and we have zero idea of what the future will bring. In August they are supposed to announce the annual report with both the old accounting standards and the new accounting standards. So we are looking down the gauntlet of a fundamental change of the profit / growth metrics of this company. Hence - I'm not a shareholder, because in a few months time, this could be worth $1 or it could be worth $5 and im not a gambler, i'm an investor.

Based on the commentary from the acting Managing director, that report will not be favorable to the profit and that there are serious risks that they will loose money this year. The MD's words were to the effect of: "we are undertaking a review to bring operating costs under the recurring management income" - so that means that currently - ie today - they are not profitable!!!! The last dividend was paid out of the capital raised, because if you read the report, their profit was less than the increase in the non-current receivables - now under the new accounting standards, those non-current receivables will not be able to be recognized on the profit and loss.

And finally, to answer your question as to what has changed - the perception of the market. People out there who hold the purse strings of the large institutions who would normally put money into Blue Sky's products are now looking at this company with suspicion. People feel like they have been lied to and treated like fools. The stench of the asset valuation issues are going to follow these guys around for years. Case in point - look at the Foundation Learning issue. They signed off on the valuation in January (because it is mandatory for the fund to be valued in January) then sold it in May for a 20% discount to book value. They had been trying to sell the company for over a year. It should have been written down in January and disclosed to the market. Now the Blue Sky guys will say, it was only a small % of the investment, but that didn't stop they crowing to the market in Jan 17 that they had written up on paper the value by 22%. This company is going to struggle to raise anywhere near the amount of money that it used to, and so by that definition, as the funds close up income will drop and this business will be broken up and sold off.

There is a chance that it will recover, but I don't see them making the moves in the right direction. They need a new external MD, somebody who has no allegiance to anybody inside Blue Sky who can clean house and instill some confidence back into the fund market.

So yeah, I'm not currently a holder, I have been in the past, but I'm watching it because if the price drops closer to $1.50 before August, I'll have a real look, at the moment, it smells, but hey, if you only want to listen to the people who take a positive view, great, do that.