Market's view on Petra Diamonds
Published on April 2024
- A stock watcher highlighted a dire situation in the diamond industry, as evidenced by a shocking production report from De Beers, which could have widespread implications.
- Another stock watcher took a speculative position in the market, buying stocks at 42.8p, hoping for short-term gains while observing market trends over the next month.
- Diamond prices are on a downtrend, adding concerns over the stability and future prospects of the diamond market.
- Recent financial accounts raise alarm, with a worrying ‘Going Concern’ statement indicating anticipated covenant breaches by June 2025, suggesting significant downside risks and potential sell-offs.
- Despite some positive trading days, overall sentiment remains negative with concerns about continual price declines and potential sell-offs.
- Discussion about the potential sale of the Koffiefontein mine, which could significantly impact debt levels and capital expenditure for the coming years.
- Speculation about market manipulation with stock watchers observing unusual trading activities and share price movements, implying potential shortages of shares.
- The CEO of Petra Diamonds purchased a substantial amount of shares, raising questions among stock watchers about the motive behind this move during a period of stagnant share prices.
- There are predictions of a possible second debt-for-equity swap which could heavily dilute current shareholders, with bondholders likely taking more control, potentially leading to a privatisation if operations improve.