Forum Archive Index - March 2001

["Ben Dutton" <bendutton@sharechat.co.nz>]

Hi Nigel,

A major problem with Ebos is its low liquidity - thus the share can have
large percentage rises and falls on extremely low turnover .  For instance,
on Friday EBO was down 10 cents on volume of 4720 (only $12,020 worth) and
on other days the share is lucky to get a couple of trades.  The spreads
also tend to be quite large, for instance, at the moment the buy quote is at
$2.51 and the sell at $2.60, sometimes the spread is even larger.  Hardly
the mark of a liquid share.

However, an illiquid share can be of benefit if it becomes popular as a lack
of scrip for buyers will push the price up swiftly (look at VTL as an
example of this - only 29,500,000 shares on issue for that company).  Don't
pay too much attention to the market depth though, there could be a seller
in the market who's broker is feeding the shares out slowly, so as to create
the illusion that there aren't many sellers.

Ebos only has 26,929,778 shares on issue.  If a large % of this is in the
hands of institutions/major shareholders (not sure on this - maybe someone
with their latest annual report can shed some light on the major holders of
EBO) then there won't be many shares available to the public - thus if the
public starts demanding them, the price will rise accordingly.

I'm still following Ebos but have to admit to being somewhat discouraged by
their lack of interest in investor relations and public communication.  It's
one of these companies on the NZSE that is a bit of a mystery to most - say
"Ebos" to many investors, and they won't have a clue what your are talking
about.

Also, Ebos don't have a website to find out more information on the company
which is completely unacceptable for a public company nowadays.

It will be interesting to see how the company fares this year.  This hasn't
exactly answered your question Nigel, but I hope it has helped a little.

Best Regards,

Ben Dutton
(Disc. do not hold EBO)


----- Original Message -----
From: <insight@edmail.com>
To: <sharechat@sharechat.co.nz>
Sent: Saturday, March 24, 2001 3:54 PM
Subject: [sharechat] EBOS


> A while ago there were a few wise heads around who fancied Ebos (I believe
you may have been one of them Ben).  I bought in at $2.79 before the surge
to $3.10ish.  I notice the price has been sliding recently (although if you
check the market depth there are not too many wanting to sell).  At
$2.50-$2.60, is this not a good buy?  I've just received the interim report
and all seems well.  Ebos seems to me like an attractive stable proposition,
that should rise up through the $4 in the next 2-4 years, and continue
improving after that.  Am I right in assuming this?  I'd appreciate the
thoughts of some "gurus", and is now the time to increase my investment?
>
> Thanks,
> Nigel.
>
>
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