Abcourt's Large Investors and their PredicamentFor the purposes of illustration I will be taking that there are 250 market days each year. I will be using the 750 day moving average of volume which is ~200k volume per day.
The investor has 25 million shares to divest himself of. He has purchased all these shares without really understanding how he would sell them. So, now he finds himself in a predicament because him and others like him have been a large slice of the volume over the years with swing traders and the odd investors that come and go making up the rest. Generally, though, these large investors are support, they are the bulk of the market and the volume long term, and, in a very real sense, they are Abcourt and its share price.
Let us say, for the sake of a thought experiment, that 5% of volume divested by this one shareholder will not move the market on any given day. So we have 10000 shares per day to divest. This is 2.5 million shares per year, or all 25 million shares in a decade. That is right, it would take 10 years to get rid of all the shares whilst not moving the market. And that is if this 25 million shareholder is the only shareholder doing this. But he isn't the only large shareholder. He is one of many. And they all want a profit on the money they have invested in Abcourt.
There is a reason why very large shareholders analyse how they move the market. It is because their profits depend on their market involvement moving the market as little as possible. The large investment banks and billionaires all understand this, or at least their money managers do.
I have used averages here. But the truth is that volume is highly volatile for Abcourt. One would require a manager to sell more heavily into the market on large volume days and resist selling at all on very quiet days. For the private investor to deal with the issue of selling 25 million shares himself in such a volatile stock would be a nightmare. But the whole thing would be an ordeal.
So, let us face facts. The only real way for these large investors to make profits from their Abcourt investment is from a huge increase in the average volume, or a higher stock price which they would be prepared to sell into and cause more of a market effect, or the complete sale of the company to another company. But all these above changes in conditions rely on the successful performance of the company. Hoping for higher gold prices is a very risky strategy compared to a well run company that maximises profits by the successful monetization of assets.
So, here we have the absolute top tier shower of shite falling from the heavens: literally none of these large investors in Abcourt choose to hold the Abcourt Management to account at each AGM! They are like the victims of Stockholm Syndrome. Imagine being terrorized into submission by a 94 year old. It is hilarious in a tragic way. Renaud Hinse over the last decade and more has not been given a roasting at any AGM, after missing targets by years and massively increasing production costs, and failing to manage any kind of development regarding Barvue. Nor has he been grilled over Decochib and his ownership of the royalty. There are much younger CEOs out there in the mining industry that have done far more in a couple of years.
I am a small shareholder and I am furious with the running of this company, and I can get out with a profit in a reasonable amount of time using the market as it stands. These large shareholders should be apoplectic. But each year at the AGM they act like it will all be fine. They have absolutely no sense of perspective. A 94 year old should not be running this company to begin with, let alone one with a conflict of interest. If they are beginning to wake up now, they have a lot more sleep dust to wipe from their eyes. It is their money they are playing roulette with. And it is Renaud Hinse with a button under the table giving them a big fat zero every time. Maybe it is time to pull that metaphorical trigger.