RJT 0.00% 0.9¢ rubicon japan trust

selling was forced rather than fundamental

  1. 1,599 Posts.
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    Today's announcement shows that one big line of RJT sold last week was forced selling. Allco's holding in the Rubicon trusts of approx 10% in each is in some way financed by a margin loan style facility. The negative is they still have 10% stakes that are being monitored on their LVR's.

    I see it is a positive. It may well be the short sellers have been shorting these to force Allco to sell. So far in general they have topped in cash rather than sell stock, once again this is a positive sign. I believe they sold RJT because there was big buying interest (Goldman Sachs), so they at least had some volume to sell into.

    Bottom line. Selling has nothing to do with fundamentals, rather just Allco gearing up, short sellers seizing this as an opportunity like they did in AFG shares.

    In fact the struggling share prices of RAT and REU has primarily been responsible in the deteriorating mark to market position of the margin loan financing the three. Therefore it was probably only the fact that RAT and REU nosedived around the week of the 15th, that they had to sell RJT. The week before that RJT was in the 55-60 cent range.
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