In inverse proportion to the decline in value of ABC Learning shares, Marathon’s have surged 47 per cent since Monday, briefly touching $2 today, and currently at around $1.97.
Logic says this shouldn’t be happening.
The company had been given the appearance of a good old-fashioned dressing down by State Premier Mike “the miner” Rann, having its exploratory drilling operations at Arkaroola suspended indefinitely for behaving like “a cowboy” (Rann’s description) by dumping 22,800 plastic bags of radioactive soil and domestic waste in two shallow pits within the wildlife sanctuary.
But Rann was actually belting them over the head with a feather duster: they had already announced the suspension of their exploratory drilling, they still had their exploration license, and they were free to go ahead with the preparation of Environmental Impact Statements as a precursor to applying for a license to mine.
All the same, the market should have retained its scepticism about their ability to eventually mine in the sanctuary, and should have been somewhat cautious following Rann’s “punitive” measures.
On the contrary, Marathon Shares remained reasonably steady at around $1.20 - $1.30 for several weeks (market confidence) and then took off to the high $1.90s this week (market optimism).
Why? We would hate to suggest any insider trading, after all, that doesn’t happen on the ASX, does it?
But that’s what the kiddies in the chat rooms were suggesting. On Tuesday 26, bottle2 in the HotCopper forum observed “This stock leaks like a sieve before announcements. Always has done.”
And right on cue, the next day, Marathon released a media statement confirming that it “has been involved in negotiations with a third party considering a possible placement of approximately 13%” of Marathon’s issued capital, “and other commercial arrangements”.
(What they didn't say was that on Tuesday the Australian Stock Exchange had demanded to know whether the company was "aware of any information concerning it that has not been announced which, if known, coud be an explanation for recent trading in the securities of the Company", and had asked for an immediate announcement if that was the case.)
Then they put the clampers on, stating that “In view of the current market conditions including the issues surrounding Mt Gee (Arkaroola), the directors of MTN believe that any further disclosure of the particulars would be premature and potentially misleading.”
“Misleading”? Marathon? LOL+LOL+….
What are they doing….dropping the Mt Gee word as a feint to the left to conceal activity elsewhere?
Or does this signal the further expansion of Chinese investment, perhaps a major tunnelling firm with world’s-best-practice credentials to strengthen their application for a license to mine underground at Arkaroola?
Well, here’s a warning boys: Don’t Under Mine Our Environment!
Those of us who have to fight bloody hard to get a wage rise of even a few percentage points out of our employers shoulld consider how hard it is being a company director.
You can’t be trusted to do the right thing by your shareholders, so you have to bribe yourself to do it!
In 2006, the directors and executives of Marathon were give options to obtain up to 2 million shares in the company as part of their remuneration package; in 2007 it was an extra 1.5 million each.
This is from last year’s Annual Report:
Options issued as part of remuneration for the year
ended 30 June 2007
Options are issued to directors and executives as part of their remuneration. The options are not issued based on performance criteria, but are issued to the majority of directors and executives of Marathon Resources Limited and its subsidiary to increase goal congruence between executives, directors and shareholders.
All options were granted for nil consideration.
Ah, that old problem of how to increase goal congruence! Lucky
for these boys that giving themsleves millions more shares is not based on performance criteria!
Sure is tough at the top when you can raid company finances using "goal congruence" as an excuse!