The tranche of shares has been known for some time, and the upward momentum of the sp to 25p+ ( despite the issue price of 19p) was due to expected news on N2 ( the Tendrara buy in was a bonus). IMHO the fall today, and probably tomorrow is as a result of a 'low key' rns. We have probably, all seen other E&D companies who release news 'ramping up' the drill toTD with comments such as ' significant pressure encountered' , etc., etc. However, this rns was too low key. I would suggest that if any of us drilled our garden to a TD of 2Kmtrs we would find evidence of gas shows. It hasn't plugged the well, and it is being tested for commerciality, so it aint dead yet. I have all digits crossed, but for the sake of risk, have sold a substantial number of shares. If it's commercial, and sp gushes to 35p, it will in time make a £1 and leave re-entry points, and of course, I still have the rights and warrants. GL to all.
hi Pablo2, yep I spotted the Westhouse rating reiteration earlier. Wow, those guys certainly know how to earn their crust. Whole process goes something like this....
'hey tea boy Johnny, where is that Sound Oil thing trading today? Just check Google Finance would you, it'll be close enough. What? 23.70p you say? Oh, thanks old chap, well that's the rating for this month done then, 23.70p it is. Well done, old boy, twenty more years, 600 more lunches out, and you might just be as good as me at this rating thing. Now run along and pick up my wife's birthday pressie as I asked earlier, and don't forget to make sure those valet chaps in the parking bay below have cleaned and polished my Aston today. Bonus coming your way Johnny if you keep this up, well done old boy.'
And their ends my cheap (but oh so accurate) shot at one of the least value add functions in all the city. Show me a broker that sticks their neck out on good research, and I'll show you 99 that plug in current market + or - 10%.
b3361, good post. I still remember those famous words uttered by Gerry Orbell ('Merry Ordeal')............'It's not dilution if it adds value'......................being able to buy into the world class Tendrara asset sure adds value - up to triple digit on the sp value!
I think this might turn around tomorrow & I don't want to miss out on my short term £40k T3 top-up! Limit Order about to be processed for 23.75.............
If they are paying a decent price averaging 21.5p (between 19p and 24p) the value of the company has not changed. People speak about dilution on all companies when shares are issued and I suppose that is the definition, but it's only bad IMO if the price paid is heavily discounted.
See Westhouse has stuck it's neck out again today and issued a massive 23.7p target price - can't accuse them of ramping.
Got an email reply from JP today within an hour of mine. I outlined what I feel are the fairest ways for allocating shares in excess applications and he replied with "I will give some thought to your ideas." - which is nice. (Might have some say in how the company is run - hooray).
In terms of impact of placing shares being registered on Friday, I see this as neutral at worst. Although the number of shares goes up by c12%, we receive an according amount of cash in return, so the value of the company goes up. This money is not being used to pay salaries etc, it is being used to invest in SOU. Secondly, as JP says in his email to you, and I think he eluded to on last week's call, he does not expect those IIs with whom the shares were placed to be sellers. This is not like a PI placing on small AIM shares where PIs sell immediately to take their 10-20%. The impact of the placing I feel is already priced in.
In terms of the PI rights issue / placing (the 1/23 for existing shareholders, excl. those involved in main placing, as of 15 May, we are only likely to get around 1 for every 23 shares we already hold. There is not a great incentive (in terms of either number of shares or price delta) or an attractive risk/reward as far as I can see it to forward selling your shares, even if it is risk free trade. You lose the upside potential which is the bigger picture. Would be surprised if either the selling over the last few days or the absence of buying was due to PIs thinking they can buy much cheaper basis the placing.
If today's weakness is about the placing(s) / misunderstanding of the impact of the placing(s) then I am very happy, as this will correct itself very shortly I feel, as no logical reason for this at all.
If today's weakness is about people getting jittery re the Nervesa 2 RNS, then this is different. Guess everyone interprets their own way. We should all remember this is not a risk free investment, but I feel much more comfortable investing a sizable % of my portfolio here in SOU (given full appreciation of all known risks and potential rewards) than in many / most FTSE250 dividend paying companies. Each to their own and GLA. Roll on the next phase for the good ship SOU.
Suisse, absolutely & 'well' said. This was always going to be about the placing. As said in my last post, the shares will be added to the register on Friday, so it will be interesting to see how our sp reacts in the light of 12% (or whatever) dilution.
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