Perhaps I can try to explain why the price has dipped, straight forward and simple market forces. Forgetting 'real' value of the business for a moment, the share price only reflects the demand for and supply of the share.
Since ERG have recently issued a large batch of shares into the market, demand has been more than satisfied. So, at the moment, when sellers come into the market, there are less buyers hoovering up the shares. Therefore, the price slips.
Getting back to the real value of the business, nothing has changed. ERG have an excellent management, a clear vision and a fantastic track record. The only doubt at this time concerns the successful integration of MSH but Mr Bellis has proved to be very good at bolting on. There is no real reason to doubt that this will prove to be the case again now.
What will happen now? In my opinion, the share price should stabilise at or before 280p (where it has recently shown support). It will then probably trade in the 280p to 320p range until such time as more news comes into the market. If all goes well, then Mr Bellis will drip feed the good news into the markets around Feb/March and we will see a gradual share price rise. Then when the figure are released in May we will have a revaluation taking us up to the 350/380p range.
So, the recent drop is really just a buying opportunity for those who are not fully invested. Nothing to worry about for investors and something to interest the traders.
Of course, I have no better an idea than anyone else in the market, this is just my view!
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