The new management team under Jennifer Warawa seems to be pulling things together. The most recent quarterly outlines the future direction for the company and then this week the company announced an 8 cent placement. Which was a surprise.

It is not two weeks since the company indicated that they had sufficient funds and would only need to raise for their share of the loans (I think they have to put in 15%).

One could speculate that the loan book growth is going faster than expected or that economic conditions may change in the near future or that this is a "get their mates and shareholders in" opportunity. I am leaning towards the latter because even the Capital Raising Investor presentation indicates they have enough cash and the last but one, investor webinar was reserved for shareholders only.

There is also an SPP and Thorney is underwriting some of any shortfall.

At this stage I would be looking at them turning the ship around and will probably be adding in this raise and then add more at 10 cents when they get there.

With the current capital structure, if they achieve what they set out to do in the prospectus then there is probably a target of 50 cents or so and so there is still reasonable upside.

Capital raising presentation

Webinar presentation

Q3 Business Update video

After forming a steady base the stock is now showing some signs of interest after the Investor presentation release at the end of last month. There was also a two hour investor webinar, which is probably worth a listen, if you can gain access.

I have started to add this week, just based upon the price action and the volume increase, although patience is needed as the amount of stock being offered is still very low.

From memory there were a lot of large investors putting money in at much higher levels and I haven't seen any selling notices from them, so guess they are hanging around and playing the long game.

The Quarterly report may dictate whether this keeps climbing in price or pulls back a bit, so I will wait to see what happens before adding more.

Investor Presentation link

Access to the recorded webinar is only by contacting the IR contact, probably because they only want existing investors to know first.

Starting to form a base, but still testing the lows and could go lower. Profitability is now on the horizon and likely accumulation has already commenced, but still too early to consider taking a position.

Stand aside and keep watching.

10 Cents Placement

Finally the expected placement came, but it is not as dilutive as I thought it would be as there don't appear to be any free attached options associated. Indeed it is not that long ago that Management were touting how well capitalised they were and yet the writing was on the wall.

I also see a Thorney representative was added to the board recently, they are obviously not satisfied with past performance of their investment and so will be looking to turn the boat around, perhaps by shaking up the Board.

With tax-loss selling still ahead of us any stink bids below 10 cents may get hit, but it looks like QFE may be heading for some short term weakness, a sideways consolidation and then increasing share price.

The dust needs to settle before I jump in, so will look at the next quarterly report and re evaluate.

I have no doubt that there are people on Strawman who held this through the downtrend, but setting a price level to exit when your thesis is shown to be wrong will help save capital.

My Rule 1. Don't buy shares that are going down and sell any held shares when the investment thesis is shown to be wrong. (Shares can always be bought back)

Prices yesterday broke the 15 cent support level and so obviously not the news that most were after, but obviously still buyers at that level.

Without looking too closely at the recent financials, it would seem that cash is sufficient for two quarters. A capital raising is on the cards and in my view would be in the range 10-12 cents with free attaching options for the Instos.

Sometimes making money is just as much about not backing the wrong horse as it is picking a winner and Instos follow a different game plan to individual investors, so it is not always wise to follow what they do.

We have smashed back into the buy zone of 15-16.5 cents and although the Xmas period is typically low volume, I wouldn't read too much into it at this point and certainly wouldn't be entering at this price as it could go either way from here. Although my bet is that it will go lower.

If the market tanks when the traders return mid-January then this will likely hit 10 cents, but maybe someone cleverer than me can create a valuation based upon revenues and give a real guesstimate.

What I am looking for is an area of sustained price consolidation and so far I don't see that as the downtrend is still intact.

Anyone that got in when Thorney was entering is probably down 50% at this point.

I got blocked by some fan boys because I was downramping. More fool them, is all I can say and following the big money is a recipe for disaster. You only have to look at Wellness and Beauty (WNB) to get a feel for what can go wrong.

One thing to note is that one of the Directors recently made a small purchase, probably more window dressing than anything else I would say, but at some point the price will be value and that is the point to pounce.

Number one rule: Don't buy a stock that is going down.

No matter the bullish fundamentals, if someone is selling then surely you can buy cheaper in the future.

I used to own QFE and sold before the top. Currently it is in a downtrend and that needs to base before any buying decision.

Why would I buy a stock that is going down, when I can buy another stock that is going up?

The weekly chart is in a long-term down trend and I would need to see the changes implemented by the new CEO be recognised by the market before taking an entry.

It could get a bounce at 19 cents, otherwise it is heading for Covid lows in the 16 cents area, in my view.

I assume that the rate of cash burn and potential of a further capital raising is weighing on the market. So this is one to place on the watch list and then look for the sniper entry when the conditions are right.

Thorney Investments is currently on the register and has been buying on the way down, but their investment criteria as a large Fund is different to mine, as a small investor.