Hmm, Blackrock sold back some of what they bought according to the substantial holder notices. The average sell price was 1.75. Blackrock probably sold some at market when the price got to 1.90 which is perhaps why the price tumbled I think from memory 30 or 40% in mere seconds that day.
FGE - Forge Group
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The share price closed down today at $1.105c (15.5%) on volume of 6.69 Million.
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Wish I got in at 59cents. anyone game enough to short it?
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30th-December-2013 11:37 AM
It's retraced back nearly %61.8 of it's recent bounce off the bottom. Time to take profits on the short and watch what it does next!
Well i sold everything this morning with 30% profit.
Im sure ill get on to that once its less volatile.
prawn_86
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Why do you think that? Can you please provide some analysis to promote some further discussion?
skc
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If I was to bet I'd say the financial positions on those f'd up contracts have gotten worse.
A potenital less negative scenario is simply that they need more working capital, having recently won Roy Hill and other projects, and ANZ or whoever have extended them further loans for performance bond or something like that.
A potenital less negative scenario is simply that they need more working capital, having recently won Roy Hill and other projects, and ANZ or whoever have extended them further loans for performance bond or something like that.
I think given the delay to next Tuesday (ie. they're buying as much time as possible) it's probably certain to not be "good" news.... and most likely it'll be to do with the inevitable capital raising that had to happen.
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What do people think of the news today?
I'm new at this whole stock market thing, so my thoughts may not be as well trained as others...however I thought it was interesting that ANZ have agreed to continue financing them.
The recorded loss is high.
It was surprising to see that while the price of the shares has dropped since it was trading, it is still high, compared to the first day of trading after the last halt.
I'm new at this whole stock market thing, so my thoughts may not be as well trained as others...however I thought it was interesting that ANZ have agreed to continue financing them.
The recorded loss is high.
It was surprising to see that while the price of the shares has dropped since it was trading, it is still high, compared to the first day of trading after the last halt.
skc
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Someone said in an earlier post, that the first estimate of loss on a troubled project is rarely the last (sry couldn't find the actual post to acknowledge the author). Additional $23-28m loss on problem contracts, another $14-19m cash required.
Even with continued support of bankers, their need fresh capital has increased in scope and urgency. I think they are probably trying to live on debt until the project is absolutely completed and the market being fully satisfied that there are no more downgrades. I suppose that is possible since ANZ is probably in a bit too deep to pull the plug now. Commissioning of those power plant is not due until end of FY14... plenty of time for things to go wrong yet for the pessimist.
I think the market is being very kind to FGE, esp on a day like today, with the share price only down ~15%. I really thought this was going to open 50% down. Too bad there was no borrow on this name. But I do think today's high will be a high for quite some time.
Even with continued support of bankers, their need fresh capital has increased in scope and urgency. I think they are probably trying to live on debt until the project is absolutely completed and the market being fully satisfied that there are no more downgrades. I suppose that is possible since ANZ is probably in a bit too deep to pull the plug now. Commissioning of those power plant is not due until end of FY14... plenty of time for things to go wrong yet for the pessimist.
I think the market is being very kind to FGE, esp on a day like today, with the share price only down ~15%. I really thought this was going to open 50% down. Too bad there was no borrow on this name. But I do think today's high will be a high for quite some time.
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Yes, I think I read the post you are referring to. And FGE have had more than one trouble.
I was surprised that ANZ decided to stay, but as you say, maybe they are in a little too deep.
I wondered if Roy Hill might be their 'positive' project, since the power stations seem to be struggling with loses.
When you say 'today's high will be a high for quite some time' - do you mean you think it will stay high, or you think today's high is the best it will go for some time?
I was expecting to see the 30 cent price we saw when it last opened.
skc
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Roy Hill project hasn't actually got full funding yet. They had confirmation to start phase 3 but I have no idea what phase 3 actually entails. Probably some early utilities / site work / design etc which isn't going to be the full project value.
Also, keep in mind that Roy Hill is one of the few last mega projects left in the immediate planning horizon. Every man and his dog will be bidding for it, as the overall sector faces significant reduction in capex spent. It was a seller's market, and a very ideal set up for the "winner's curse" situation.
The latter. Share price won't exceed $1.21 for some time.
Then again, I am often wrong.
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Thanks skc - all very interesting points! I'm still learning, so lots of things to take into consideration
There is a very good chance Blackrock sold their holdings this morning. The price plummeted on extremely high volume. There was then major volume going into those up bars, likely selling into the buying by Blackrock. If I wasn't busy this morning I would have bought because I knew there was a good chance there would be a huge sell off by big money. I actually forgot about it since there was a mini crisis at work We won't see a change in substantial shareholder message from them though since they sold off over 1m of their holdings previously and that notice came on Jan 6th, removing them from being a substantial holder.
We won't see a change in substantial shareholder message from them though since they sold off over 1m of their holdings previously and that notice came on Jan 6th, removing them from being a substantial holder.
