ERC rescheduled hearing 21st March, page-4

OK guys we now know what information the shorters were most likely front running. We have always considered the shorters to be well informed. It may have been the ERC announcement but it was more likely the release made to the market this morning.

The release this morning shows EWC dropping out of the ASX 300 index on 20th March. We know now that the price movements over the last week or so were likely nothing to do with value in the business and more likely relate only to short term liquidity.

Let’s look at what happened when EWC dropped out of the index last time. On 21^st March 2014 EWC dropped out of the ASX 200 Index. Prior to EWC dropping out of the ASX 200 index the shorters increased their short from around the mid 40 mill to just over 60 mill dropping the share price from mid 40 cents to around 30 cents.  The announcement of EWC dropping out of the index was made to the market on the 3^rd March 2014.

Once again the shorters are likely to have front run this announcement to the market but this time they only started the front running a week or so before this announcement.

I expect they consider this to be a very lucky “bailout” of their position if they can get their hands on the stock coming from the index change.

This now strongly suggests  that the last sell off from the mid 40’s was nothing to do with value and progress of the business but rather manoeuvring the price down to hopefully buy the released index shares at a better price.

If they don’t buy these shares and someone else does (ERC completed on 21st with clear official backing and land issues almost resolved will focus others on this stock) then they will be forced to operate as they were before this bit of luck and push the price considerable higher. The recent 9 mill they bought caused the price to move up to mid 40’s and if they miss the stock this time it will spike much higher than that on their covering.

Watching with interest