Newsflash for the Snoozers- Part 24

Wednesday, 28th December 2016 13:27 - by Moosh

Empyrean Energy (EME)

After the release of the EME interim results last week, it gave me a chance to review the situation with a little more thought. While I am still a long term shareholder in EME, I am unlikely to be adding to my hold until a positive drill result, which may or may not happen until well into 2019 and beyond. Do I fancy having new capital locked into EME for 2 years while the company fudges about with seismic data interpretation and then with impending share dilutions due to financing any drills for the new block in offshore China? Actually, no, I don’t fancy that, especially when there are other companies on my radar which are showing me better fundamentals over the next couple of years while EME treads water. With the adjustment of options from Macquarie to the new buyer, I am also wondering if a similar treatment will be performed for the options still open to the directors – if this is the case then a revision of the price of them downwards may give many shareholders reason to sell because historically, EME shareholders have been very stubborn in wanting to buy EME when the price was above the options’ price so I will see how things pan out regarding this issue. Let’s get back to basics though, when investing on the stock market, you want to buy something in order to sell it at a higher price and on the face of it, I can’t legitimately find any reason for someone to buy my EME shares from me if I were to buy before 2019 so I am putting EME on the substitute bench and may write off the investment in time if the company ends up with a massive dilution of shares in order to finance future drills.