Renergen* (JSE code: REN), now what?

Late September the price started breaking down and end September social media posts started appearing asking all sorts of questions and making various claims.

I’m not going to defend every point raised, that’s the job of the company and after an initial poor response, Monday saw a more detailed announcement.

Paid research.

Ultimately all research is paid for. Sometimes it is paid for by the company and here the issue is disclosure.

I think the bigger issue is a complete lack of disclosure in our industry. By FinTwit or the fancy analysts, (albeit assume the fancy analyst is always talking their book, which is fair). We have no idea who on social media is talking their book, pumping or dumping or being paid the same with YouTube videos and podcasts. now the vast majority are certainly legit, but some definitely not and we have no idea.

Perhaps the biggest point from this last few weeks is;

• Know your stock. Like really know it. When I buy a new holding I put together a lis of 3-5 things I like and 3-5 risks. I may be wrong on any of them, but it makes me do the digging and at least have a decent view of both sides of the story.
• Careful of “new” news. It may be accurate (or it may not), but it also often lacks detail which maters. This was mostly the case with the Twitter news on the stock.

Now what for Renergen

• Results next Friday.
• LNG is flowing.
• Helium is not, but company has said they expect the leak repaired this month.
• In short they are in the same place as they were before all this started. BUT.

• They need to do a US capital raise and list in the Nasdaq. A low share price makes this much more dilutive. How this will play out I have ideas, as does everybody. But I have no insight as to management plans beyond what they’ve publicly communicated.

I hold and continue to hold Renergen*. It was never going to be smooth sailing and the risks are real. Yes they have the gas and helium in the ground, phase one is half working but phase two is large, complex and expensive with real risks.

Simon Shares

• Middle East war could get really bad for inflation and rates if oil prices rise markedly.
• Decent Calgro M3* (JSE code: CGR) results.
• Horror Pick n Pay (JSE code: PIK) results.
• Local ETF total returns over the last five years.

* I hold ungeared positions.

Thursdays are all about hard-core investing and trading with Simon Brown’s famous JSE Direct podcast. JSE Direct started life on ClassicFM in July 2008 and became a podcast in 2011. Every week Simon shares his views on the state of global economies, individual shares and events moving markets.

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