Australia | Jul 18 2006
By Rudi Filapek-Vandyck
Chairman Wayne McCrae and other board members at CuDeco (AUM), formerly known as Australian Mining Investments, are about to learn that there are two kinds of investors: those who are happy because their decision to buy shares made them a profit, and the others.
As one would expect, the strong run up from 29c to $7.11 (let’s not count the short peak at $10.00) in the CuDeco share price has created an unknown amount of very happy investors. The sharp decline in the share price since the ASX lifted its ten day suspension, however, has also created a group of "other" investors.
There is nothing as spiteful as an investor who just lost part of his money, especially if the blame can be put onto someone else. Newspapers are reporting this morning Melbourne based law firm Slater and Gordon, specialist in class action cases, is looking into the matter.
CuDeco management is about to find out that a hype tends to have two faces. The official clarification issued on Monday effectively cut the company’s inferred resource to less than half of the previously suggested 59m orebody. No doubt this will figure prominently in any court case that may possibly follow from here.
In addition, the Australian Stock Exchange and ASIC are continuing their own investigations in the matter. The ASX enquiry reportedly involves the short selling of CuDeco shares by certain stock brokers prior to the ASX suspension.
CuDeco shares continued their slide today, falling 4.78% to $3.39 at around midday. Trading volumes remain unusually high.