I hope I am not speaking too early, but today it looks like the selling pressure is off and more normal conditions will return, where the investors will be responding to news from the company, rather than trying to soak up excess liquidity from the HH dealings.
My view that next few days will be played by people who bought cheap from HH keen to make quick 10% or 15%. Shareholders in for long term might be adding to their positions at relatively low levels.
As I said in earlier post few weeks back, the decision by the board to sweeten the convertible notes deal for HH was unfortunate to say the least. If HH wanted cash for their notes instead of converting, capital raising of 11 or 12c at 1 for 10 or 1 for 8 shares would achieve the same thing, without hammering the share price.
Besides the company now has other partners they could have tapped for cash if indeed they needed the money in first place. And they have negotiated banking facility which they could have been used. So giving the favorable terms to HH to convert was not the greatest decision they ever made.
One objective it achieved was increasing the capital base by 50 million shares, which is probably good given that majority of shares ( I believe around 80% ) is very tightly held by major shareholders who have not intention of selling at low levels and probably never. So little bit more liquidity is a good thin IMO.
So given some good news and good profit numbers we could get more interest from market in general and some boost for SP. Watching and waiting with abated breath.
CBD Price at posting:
10.5¢ Sentiment: LT Buy Disclosure: Held
