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Shorts wont close until D4E situation is resolved as that would determine shareprice.It was a stonking after last RNS and shorters have made a killing.I guess bondholders were shorting too as a hedge against their bonds.
Spot on PaulCurtis but gamblers here are living in fools paradise if they think that bondholders would let them escape with any profit if it was to be had.In these sort of situations bonds tend to predict exact situation and if bondholders are willing to take 15% of their original investments then shareholders stand no chance of gaining anything.People have chosen wrong share to gamble on and it would cost them heavily.
Hard to predict shareprice as D4E would determine the price.It can be 1p,2p,4p,6p or 10p nobody knows.But bondholders would leave. little to no value for existing shareholders.Anyone taking a position now is gambling and can effectively lose the lot.
If bonds are trading at 15% then rest assured that equity is worthless, they will inject the cash and convert most of debt into equity to take advantage of future gains to recoup their money.Problem is it has fallen from 750 after bribery fiasco and has not recovered since then.Problem is they have been slow to gain new buisness and this sort of buisnesses operate on paper thin margins and it takes very little to turn a profitable contract into loss-making but as long as you keep on winning new contracts they will even out books.Covid was real culprit here which ground everything to halt and company has never recovered from there.In my opinion we have a bunch of gamblers who are gambling on "bigger fool" theory however they have chosen wrong company here and that will cost them heavily.
You have got to be fool to believe that RTO is reverse takeover and only suitable for cash shells while MBO is out of question right now as they would have to taken on liabilities as well.It cant even be called a gamble as it is only going one way from here.D4E price would determine the share price and if management believes that shareholders would lose a big chunk then expect it be lower that current price.Look at these sort of deals in the past and in most cases shareholders have been wiped out.
D4E would leave very little value for existing shsreholders so why are people rushing to get in.By the looks of suspension would only be lifted once results are published and D4E is completed so that would leave no time for existing shareholders to exit.
Wjhy wpuld you want to buy now when company has clearly stated a D4E swap which would heavily dilute existing shareholders if not wipe them.If someone wants to buy this why should he/she not wait until recapitalization is complete.
Think increasing revenue is key here and that is what this company is doing.If they can increase cash flow then debt can be paid a lot early.Risky investment but can do really well if they manage to pay off debt.
But that sort of money tends to flow into Gold and recently a lot has gone into cryptocurrency.It was construction boom in china due to which vanadium hit 130 level.What transpired afterwards is a different story and nobody knows where it will end.Demand was expected to increase after covid but that did not happen.
These"definitive statements" I am making are based on RNS.We had an update according to which if they dont get no money then they will need to suspend operations.As far as price of vanadium is concerned it was construction boom in china that drove the price up in 2016 and right now gobal economy is struggling.Company is shot of funds and would need to raise money soon in my opinion.
Problem is they cant keep on deferring it forever and besides that money will need to raise money for working capital as well.Now look at full picture they are not making money at current levels , have massive debt to pay and production will be stopped soon.If Vanadium prices dont increase company is in big trouble and I cant see that happening.
How can we say company does not need immediately they need to pay 7 millions to Orion shortly and need to raise money to fund day to day expenditures as they are not making any money at current price.2.2 millions wont last long and this sort of money would certaintly lead to shareholders wipeout!
Even if they receive money from SPR and Acacia now they will need to find 7millions shortly to pay orion and need some working capital too.At this point placibg would sort out funding issues but would wipe out shareholders certainly.We may see Vanadium entering a supercycle again but Bushveld wont be around.
There is "ore " in the ground but extracting it commercially is key here.Some oil and gold mining companies were in the same position but dont think you can compare vanadium with them two commodities.Company has debt to pay and there is no cash flow at the mintue plus it is not making any money at current vanadium price.This cant go on forever.