Usually, fast-moving stocks attract hordes of day-traders (speculators).

Day traders build huge positions in such stocks and close their positions before the day ends.

When there is limited supply of a stock, most of the selling comes from the short-sellers.

Short-sellers can't give delivery and are weaker compared to the buyers who can take delivery.

The buyers can't be forced to liquidate, but the short-sellers have to cover their position by the end of the day.

As price keeps going up, one group of short-sellers covers, but these short positions are replaced by another group of short-sellers as there is no one who really holds the stock.

It becomes a viscous cycle and doesn't end till the longs decide to close their positions.

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The stock hit the lower circuit on opening.

Investors expect the shares to be credited today or tomorrow and thus are selling in the open market.

I expect the stock to hit at least another two lower circuits - on Friday and Monday.

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Alchemist is there any fundamental change in the company? What would be a good price to enter?

I think it will hit 226 in coming week, will it be excellent buy?

I have to do my homework yet, what are your thoughts, since you follow this company!

It has excellent margins what do you say?

Current Shares outstanding.........................1,91,99,552
New shares issued to Varkey group.................26,18,120
===========================================
Total Shares outstanding post issue.........................2,18,17,672



Existing promoters....................................... 41,17,898 18.87%
SKIL Infra............................................. ..... 40,00,000 18.33%
Varkey Group ( Market purchase)................... 12,04,071 5.52%
Varkey group ( Pre open Offer)...................... 38,22,191 17.52%

Current Public Float ......................................98,77,583 45.39%
Open Offer for 20% stake.............................. 44,83,535 20.6%

Acceptance Ratio......................................... 45.39%


Consolidated EPS for H1FY12 is Rs 3/-
Even at 25x FY12E EPS, Fair Price = 6 X 25 = 150/- per share.

For every 100 shares,

(45 X 528) + ( 55 X 150)
------------------------- = 321.50
100

So fair value is 321.50 per share even at forward P/E of 25.

So pre open offer proper price was Rs 321.50/- and post offer proper price is Rs 150/- assuming a forward multiple of 25x.

Do your own due diligence before investing.

The company has done significant dilution in the last 12-18 months and also has diversified its business model.

The earnings will have to reworked based on the new equity base.

Also, I am not sure where these new businesses are going.

Right now, I don't have a view on Everonn.

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I had a look at this company, it suddenly did Sept 2011 negative.

Where did all the profits evaporate? Looks like Kishore was doing satyam style!

Look at balance sheet, cash is halved and so did investments.

I will not touch this stock!