CDU 0.00% 23.5¢ cudeco limited

Hi malgmac, As I see it a lot of trading behaviours and registry...

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    Hi malgmac,

    As I see it a lot of trading behaviours and registry issues were well established months
    leading up to the 18th August, 2010, resource announcement. This raises issues concerning
    the resource estimate itself. Information gathered has provided the background from which
    the trading behaviours that took place on the 18th August, 2010, can be meaningfully
    assessed.

    So the trading data associated with the 18th August, 2010, has been processed from a number
    of differing perspectives including an hour by hour breakdown of trading where
    individual broker involvement is readily observable. The impact on the register of the
    trading that took place has also been assessed with somewhat surprising results in that
    the distinguishing feature was a “lack of impact”.

    The 18th August, 2010, trading of CDU witnessed 16.47 million shares being bought and sold
    but not necessarily changing hands as a lot of the transactions appear to be non genuine
    “wash trades”. The bulk of the trading consisted of entities taking the opposite sides of
    each others’s trades, in a series of “round robin” share exchanges characterized by:-

    1. sold shares being immediately re-purchased.
    2. purchased shares being immediately re-sold.
    3. most transactions targeting lower prices, and
    4. minimal changes to effective ownership.

    Some motivated selling overlaid on top of the “back and forth churn” ensured that
    prices remained under extreme pressure for the entire day. Many retail holders were caught
    up in the market volatility and incurred substantial losses through forced margin selling.
    Others capitulated in the chaotic trading environment and sold their holdings through
    irrational panic.

    The trading behaviours associated with the 18th August, 2010, were not much different
    from what occurred in the months leading up to the resource announcement, except
    that massive uncertainty about the resource provided the catalyst for particular types
    of trading strategies to have a devastating impact on the market.

    The question of whether or not the market was unfairly manipulated on 18th August, 2010,
    or for that matter throughout the months leading up to the resource announcement could
    easily be resolved through the auditing of accounts. Falling short of that, attempts to
    normalize and approve the situation need to be able to satisfactorily account for
    the anomalous trends that have become firmly embedded in trading and registry
    data. Trends which for example have led to the highly unusual situation where the
    share price has become somewhat redundant when assessing CuDeco’s worth. A fact
    borne out by the company consistently raising finance at a strong premium to the
    share price, which is an extremely rare feat within the mining industry when funds are
    required to establish new projects.

    The challenge is to be able to explain disturbing trends and the heavy losses imposed on
    retail investors in a way that can convincingly demonstrate to Authorities that the market
    has not been acting fairly, transparently and efficiently in performing the functions
    expected of it.

    That is why it is necessary to make representation to Senators for the establishment
    of a Senate Inquiry, when the Government fails to have a Royal Commission as was the
    recommendation of the Senate Inquiry into ASIC.


    Cheers,

    Max
 
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