ERG 23.5% 2.6¢ eneco refresh ltd

More random thoughts.........

  1. 420 Posts.
    I believe the initial price drop in ERG from 26c to around 23.5c midweek was due to the following press release, dated 28 Aug 2002:

    ".....ERG Group today announced that it has changed the date for the release of its financial results for the year ended 30 June 2002 from 2 September 2002 to 12 September 2002.

    The Group's Chief Executive Officer, Mr Peter Fogarty, is involved in overseas negotiations that conflict with the original timing of the results announcement. The delay will ensure that, when announced, ERG's results will be fully audited as opposed to being in the process of being audited....."

    Investors panicked a little when reading this, interpreting it as bad news for the company. This was mere speculation or supposition however, as no other news either good or bad, had been released concerning its operations.

    On Friday, August 30 however, things took a turn for the worse. Late in the day, heavy (presumably institutional) selling occurred, driving ERG's price to an historic nadir. Reading between the lines, I'd guess that negative information concerning ERG's operations had somehow been sniffed out by the instos using their battalion of resources, both overt & covert. This augurs worringly for ERG mum and dad retail investors.

    The $64,000 question is if ERG's postponement of its annual results meeting was due to reasons other than that stated in their company announcement on the subject, but was in fact due to something more nefarious than this - is this the information suddenly ascertained by the institutional moles leading to ERG's shareprice nosedive?

    Persual of today's business press reports give nary a hint of anything untoward happening at ERG, so it must be stressed that the above conspiracy theory is just that - a theory. Not facts.

    My gut feeling is that ERG's price movements next week will be fascinating to watch. The shorters currently are having a field day with it - with a shorting percentage at the moment exceeding one per cent of all transactions, this places it amongst the top half dozen or so shorted companies on the ASX.

    Conversely however, should a turnaround occur & ERGs price begins to rise, it'll be amusing to watch all the shorters scrambling to cover their positions. ERG's shareprice in this scenario could easily rise a couple of cents or so fairly quickly.

    My thoughts, for what they're worth.
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