Western Mining Network could be signalling a bubble in the graphite space, if not something worse
John Robertson
PortfolioDirect
Western Mining Network could be signalling a bubble in the graphite space, if not something worse. The company has announced a deal to buy an Indonesian graphite asset. According to documents lodged with ASX, the asset's vendor will be entitled to 50% of the outstanding shares on deal completion. In the event that the market capitalisation of WMN rises from the current $22.1 million to $100 million, the vendor will be entitled to an additional twenty percentage points of ownership in three steps. Any investor (misguidedly) buying now stands to be heavily diluted along the way. A buyer today at 28¢ a share, for example, could receive as little as a 36% capital gain in the event the market value of the company was to go up 350%. When deals like this can get any support, something is going wrong. Please say no.
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John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business strategist and investment market professional for over 30 years after starting his career as a Commonwealth Treasury economist in Canberra. Since being Australia's top-rated commodities analyst and chief economist at one of Australia' leading stockbroking firms, he has advised companies across the mining, consumer products, IT and biotech sectors on their equity market relations. He leads the firm's investment evaluation and security structuring activities on behalf of the Australian Small Scale Offerings Board (ASSOB), the world's first equity 'crowdfunding' investment platform. John Robertson discusses the interaction of mining and investment markets in his weekly 'From the Capital' column in Mining Journal.
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John Robertson
PortfolioDirect
John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...
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