The management/major shareholders have been buying back like nobody's business in recent times (the impairment back in May definitely helping them - hence is it creative accounting? Perhaps). They've attempted rights issue/placement that got shot down by their shareholders earlier. How do these events gel?

1) If they act in good faith and really want more money for their operations (which they are not getting from any rights/placement exercise), perhaps the only way is to:
a) deflate the market price
b) buy back loads of shares
c) impairment having been dealt with in the last quarter, the next quarter will look distinctively better
d) throw in a new project, might even look positive
e) that's when they'll attempt to make a killing, then use the money for rights/placement exercise
(the question is - the price is already so low now, with infusion of new shares, surely the price will be further diluted - so issuing at 10sen seems far-fetched - why would any shareholder want to get additional shares at so high a premium?)

The people who got screwed worse are the investors who ditched the shares while the price is at the lowest ebb. The next batch of investors getting screwed big time are those who wait for the placement/rights issue to happen.

2) alternatively, the company is really going south and headed for pn status soon

The first possibility looks more likely to me because if the company is headed south, what's the point of pouring more of their own money to buy junk shares?

Any thoughts?

This post has been edited by Quigonbond: Aug 10 2011, 03:53 PM