There is clearly an asset of significant value. I think the problem is that private investors think it belongs to them and do not realise that the business is consuming cash and will run out before it gets to production, in which case the shares are valueless. If the directors have cash forecasts that show they can not meet liabilities as they fall due, they have to act as soon as that is a reasonable prospect, despite still having money in the bank. There are many examples of businesses going into administration with money in the bank but not enough money to meet future liabilities. I do believe that the asset will produce a lot of profit but the current investors will share little if any of it. In my opinion, there will be a massive dilution or an administration and the current share price shows I am not alone in this view.
Agree that it does not look imminent but the business is trading cash negatively, as you would expect at this stage of development, and unless it secures new funding, it will eventually run out of money. Once the cash forecasts indicate that they can not meet liabilities as they fall due, , the responsibilities of the directors changes from acting in the best interest of shareholders, to acting in the best interest of creditors, which generally means the providers of debt who frankly, do not care about the ordinary shareholders as we have seen so often this year.
Think it is very unlikely to be liquidation. Be far more likely to be an administration where a new buyer with cash to bring the project to fruition, picks up the work done so far for next to nothing at the expense of the initial investors. An all to common situation in this type of business where I sufficient funding is secured at the outset due to over optimistic assumptions.
Hope people were actually realising he was talking sense rather than the ill-informed drivel that some were posting suggesting people buy.
HK
What did happen to Paulplantearth who was posting regular strong buys several times a day, for weeks?
Mark,
Agree a suspension looks highly likely and total shareholder wipeout is now more likely than not. Would not be remotely surprised to see a pre-pack administration announced early in the week.
Where would you stop? People currently calling for bailout of Sirius. What about Debenhams, House of Fraser and Patisserie Valerie to protect the High St. Flybe? Carillion and Interserve? These are just some recent names
Suspect many investors, who are prepared to admit it have their own stories. I lost a lot of money many years ago, continually averaging down on Marconi, that once huge ( to big to go under, government will bail out etc) company where recovery was only a few weeks away. Recovery was not there and this lesson has stopped me averaging down since.
Except Ryanair is a profitable, sustainable business in a very difficult market and whilst you (and me) may not want to use it, huge numbers do.
Avocet,
Nor Debenhams, Interserve, Flybe or Afren to name just a few more. There are just so many instances where initial investors and Boards completely under estimate the cost of bringing projects to a cash positive position and run out of money before. Suspect the same will happen here, initial investors will be largely wiped out and someone with deeper pockets (and possibly more realistic expectations of time frames) will benefit from the initial work. Just very sad to see that some people have gone against all sound equity investment principles, and invested more than they can afford to lose.
And what has happened to Paul... who was on the board daily for weeks promoting this as a strong buy? He was not alone, just hope that individuals did not lose money by believing some of the rubbish being posted on here in the way that a number lost money on Debenhams by buying into some of the absurd recoveries being predicted.
Agree that it does have a unique product but there have been other examples in the past where it is the second or third phase share holders who make the money after the initial investors are wiped out through an administration or massively diluted via a debt for equity swap as the cash requirements are so often way in excess of initial estimates. There is another potash company at a similar phase listed on aim with continual cash demands.
It is in exactly the same phase as all those other companies I mentioned got to, plus Flybe and Afren. It is a penny share where money can be made or lost on sudden bounces, it is those who hold to the end that take the hit. Thomas Cook is a great example. Just 5 weeks ago speculation sent the price more than doubling in a few days from c6p to 14p. The Board was full of rampers saying “fill your boots” and 30p coming. It is now at 4.5p and heading down.
I totally agree, your own research is essential an these boards to contain some very inaccurate posts.
Point is that some people are seduced by what they read. There were a couple of very sad stories on Debenhams where individuals lost more than they could afford due to what some were posting which was nothing more than wishful thinking and ignoring fundamentals. This business is currently cash negative and requires funding, those organisations who hold security care nothing for the PI and would happily wee them wiped out if needs be.
For any new investor, if you look back you will find exactly the same comment on Thomas Cook, Debenhams, Interserve and Carillion in the recent past. This is not an investment, it is a gamble where shareholders could be wiped out just as easily as making money.
Theoretically it could but looking very unlikely. Interesting to note that all those posters who less than 5 weeks ago were out in force suggesting a strong buy and saying it could not go under, seem to have largely disappeared. If what some were saying was correct, and they were “filling their boots” on the recovery to around 12p, the. They are sitting on some very large losses.
And all only 5 weeks since a number of deluded posters were predicting share prices above 20p, “fill your boots time” and “strong buy” conveniently forgetting all the fundamentals and corporate statements, and driven by greed and blind optimism. Just hope that, like Debenhams, Carillion and Interserve in the recent past, inexperienced investors did not follow their views.
As recently as July, Dan.p was predicting “way over 30p”. Clearly forecasts are not his strong point!
Or long established (150 years+) Lehman Bros with 60 billion dollar turnover.