Sirius Minerals shares plunge after warning it can't raise funding for giant Yorkshire fertiliser mine

Bad news for Sirius Minerals investors.

BBC | Telegraph :lock: | Alphaville :unlock:

Judging by the comments elsewhere, it seemed like quite a lot of people bought their stocks because they were priced in pence :grimacing: I hope we can help people focus on the more important aspects of a stock before they invest.

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small cap mining stock is in my view highly risky: with enough capital, multi bagger, without, race to zero

almost like fintech :slight_smile:

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It was the same with Debenhams, people saw it was cheap and decided that they were buying the dip

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They were buying a fast track ticket to an even bigger dip. :joy:

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Yep, but with a bit more liquidity! I can see why recent investors took a punt - I guess any investors that bought at 10p on the chance they would eventually secure funding and release the JP Morgan funds saw it as having the potential of a 40-50% recovery if they didn’t secure the funding. Making it similar to an EIS total loss investment but without the time lag of claiming loss recovery from HMRC.

And probably a higher chance of success to be a multi bagger. Even if you thought they had a 10% chance of securing the funding that is probably better odds than a crowdfunded startup, especially with the potential JP Morgan funds on offer and over a similar timescale (and dilution prospects).

Maybe they should have opted for an ICO instead of bonds - they would have probably been oversubscribed! :joy:

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Feels like a gamble indeed: hoping for someone to come in and bail them out. Too many uncertainty and moving parts that a retail investor just has not much control and visibility of.

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Totally a gamble now. But I can see why people got in after JPM announced available funding. And I can kinda see why people got in after they said they would postpone the bond issue until September. Now only investors with a seriously high risk appetite or special situations expertise should be considering buying. If funding does come along I think it will totally dilute existing shareholders out the game

From a non investment perspective I hope they find funding. It would be a real boost to the region and be good for the economy in a post-brexit Britain. I also read somewhere that a lot of people in the region are retail investors in the company (in anticipation of what it will bring to the area), so it would be a double blow for them

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You raised a very interesting point here which is I would rather invest in private companies under tax relief schemes than putting money in small caps in public markets.

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