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Crazy, why would anyone ever want to invest in this?Offering a 94% discount on shares.... slipped a R100 in , see what happens.
News link -> http://www.theglobeandmail.com/report-on-business/international-business/african-and-mideast-business/lonmin-stock-discount-signals-trouble-in-south-african-platinum-industry/article27180930/
I can understand those throwing in R100 or R10k or R100K at 94% discounted prices, but even they are set to lose everything in the short term.The platinum industry has been stumbling from crisis to crisis for the past several years. Global platinum prices have dropped by more than 50 per cent since 2011. The industry has been plagued by rising costs and labour unrest in its South African heartland, including a heavily damaging five-month strike in 2014 and the notorious police shooting of 34 protesters at Lonmin’s Marikana mine in 2012.
Because they appear to have a plan. If you read further in the articles, they talk about the discount being used to create capital and then the likelihood of raising further capital via banks. I suspect ( my tinfoil hat ) that they will use that capital to move operations out of South Africa and go elsewhere where the labour is less problematic and start again. The basic fact of the matter is that industries still use platinum in a lot of processes and it is a finite resource. Unless those processes can use alternate metals, it should, eventually, recover. And if it recovers even a tiny bit, PROFIT!Crazy, why would anyone ever want to invest in this?
I can understand those throwing in R100 or R10k or R100K at 94% discounted prices, but even they are set to lose everything in the short term.