joewolf, I agree this has me a bit perplexed also.I don't think...

joewolf, I agree this has me a bit perplexed also.

I don't think the pending increase in gas prices is an issue as both of the open cycle gas turbine plants operated by ERM (Oakey and the one in WA) are peaking plants i.e. they only operate for a few weeks a year when the pool price gets much higher than the base load price. As Grant King (CEO of Origin) once mentioned, Origin run the Mt Stuart peaking plant in Townsville on Av Gas, the most expensive fuel you can buy.

The volumes that have been going through today and yesterday are over 4 million per day. This is well in excess of the average volumes prior to the latest ASX announcements. I checked the latest ASX/Chi-X short selling data (28/4/2014) for ERM, available here:

http://www.asx.com.au/data/shortsell.txt

There is only 213,444, or 0.08% of shares shorted. So it doesn't seem like there is any big move there, unless there is the T+3 day delay in reporting short selling as well.

I can't see any reason for an almost 40% share price drop based on the contents of the latest ASX announcements.

The main competitors to ERM are large reputable companies like AGL, Origin, Energy Australia, and recently Macquarie Bank which is now getting into energy trading. So I wouldn't expect any shenanigans from these players.

The only thing I can think of is your option 3 Joe. That someone is expecting ERM to get Macquarie Generation, and is pushing the price down to get a good price on the capital raising. But surely ASIC or the ASX would take action in that case.

Does anyone have any other ideas?