Seems a few here see the floor at 10c.
Well this post may break a few hearts but Ithought I’d share a different perspective…
The double-edgedsword…
Trying my best to look at AGY’s currentpredicament through unbiased glasses. Having a decent stake in a company cansometimes cloud your vision and judgment. So I sat back and thought about what’scurrently going on and how it will play out???
I thought I’d post up my thoughts and thensee what points (for and against) came back to get an even better picture ofwhat’s ahead.
I think its safe to say that no one isgenuinely happy with the current sp or the uncertainty that has clouded AGY inrecent times. But at the same time no one can fault them for each milestonethat they’ve ticked off along the way.
But the sp doesn’t lie and there lies theproblem…
We can blame macro, blame lithium pricing,blame china, blame trump, and blame Morgan Stanley. Hell, we can even blame thedonkey but one thing that you can’t deny is that a company’s stock price is areflection on how well it’s going.
Yes, the sp can be manipulated to an extentbut long term manipulation in one direction is starting to stretch thefriendship. That’s called a trend and that IS correlated with how well thecompany is going. Like it or not.
Having invested in many a spec stock Iunderstand the cycle toward riches is never paved in gold or is it ever alinear progression. So I think we are at a critical time right now to see ifthis company is one that is destined for greatness or has just shown how greatthey can lead all their faithful SH’s down the garden path.
And there has been some times they haveshown their deception.
There was Alex tweeting how great the plantis going the day before they released the ann to say the plant wasn’t actuallygoing at all…
Jerko’s little pump ups around xmas to leadus all to believe that the OT’s were pretty much as good as done. Only to slapus with a CR and a further depreciation of our sp shortly after.
It certainly worked on me as I bought upbig leading up to the latest set of ann’s.
So it really made me think about this wholeraise and the real intentions behind it. I’d been naive enough to take all theother ann’s on face value and it hadn’t got me anywhere so I thought I’d look abit deeper this time.
On face value it looks ok. Stops anydesperation deals getting done, floats the balance sheet and allows furtherworks to press on forward.
But why else would they need this?
Why now?
How can it benefit management or otherlarge holders?
(Cause lets be honest they own the lionsshare so they matter the most)
Lets look at the upside first – althoughthis does come with a short term downside.
The upside is management and the largestakeholders must be very confident that the company is going to progress wellif they want to grab some more shares for themselves.
But it’s only a 15/1 deal, so no one canreally acquire all that much right?
Enter the renounceable rights deal…
Remember these rights are tradable;therefore enabling large holders to grab bulk amounts more if they wanted.
The issue before this was - If you were alarge holder that wanted an extra 5 million or so shares there would actuallybe no other way to acquire these. In fact there’s not even that many shares upfor sale even if you ran the sp to $1!!!
But if you allowed a tradable rights dealthen large holders could pick up as many as they want (well up to 60 oddmillion anyway) around the 10c mark.
So of course they’d be happy to pay a 1-2cpremium to purchase bulk shares at 11-12c. They’d be happy with that right?
Ummm, sorry but here comes the short termpain thing.
I’m pretty sure they won’t be happy withthose premiums. Cause if the premiums stay that high then that means morepeople will take up their rights leaving less on the table to buy. Plus, if itsoversubscribed then they will get even less!
In other words if the sp is at 12c thenpeople see the discount to 10c as a great deal and take it but if the sp is at9c then a 10c deal is crap, so no-one takes it other than those that see valuein bulk orders. Then the little guys pick up at sub 10c and the big guys pickup bulk and everyone is happy – if it runs north soon after…
That’s why it makes no sense to leave thesp above 10c short term.
Dropping it below 10c will have less peopletake up the rights (leaving more for the big guys) and also get premiums downas low as possible as they should really be worthless as people can buy onmarket sub 10c (in small amounts).
Call me crazy and I’ll probably be provenwrong but as I said I’m looking from an unbiased view.
So if it drops below 10c - how long for andhow low will it go?
Our dear friend
@seagull is one of the bestTA guys going round and even he is seeing mid 9’s on the horizon. Althoughpersonally I see the next decent support level at mid 8’s. These levels wouldhave seemed preposterous 12 months ago but look where we are now…
Why?
Well, here’s that double-edged sword…
If the big holders and management are lookingto get in and fill their boots then we may be in for some short term pain, wemay see the sp beaten down below 10c for a good portion of March until therights issue is all done and dusted.
BUT and I say that with capitals because Ithink what is short term pain in the scheme of things will play out beautifullyonce the rights issue is done and the big guys have all strapped themselves infor the ascent. Cause if they run it north then they will run it hard.
However on the other side of that sword asI alluded to earlier - the sp doesn’t lie.
We have been in a down trend for some timenow and even positive anns have caused our sp to dive so you have to sincerelyask is there something sinister to this or is the sp actually a real indicationof the company and where we are headed?
Is the CR to prop us up short term whileall the i’s are dotted and the t’s are crossed?
Or is the company in need of the fundscause there is no imminent deal and they’ll need it to see them through thelong haul?
Milestones have been hit and some of themare certainly nothing to be sneezed at. The fact that they’ve developed aproven process where many before them and are currently failing is nothingshort of sensational.
But I guess until there is money in thebank and a confirmation that the process is actually working on a large scalethere will always be questions…
There are some tense times ahead and Ipersonally see some more pain to the sp.
I genuinely hope it is very short term and allthe confirmations we have been looking for are just around the corner (I’d behappy with April).
That’s all IMHO and I’m also genuine when Isay GLTAH.
It looks like we are set for one hell of aride whatever happens…
