Teutracker - Well said and I agree with you. I was surprised by the amount of the drop especially since all I could see on Level II (Actually it is the new Total View) was buying activity yet the price kept dropping. Bid volume was hidden so all anyone without L2 would see is large blocks on the ASK side and little on the Bid followed by lots of trading. I posted on this several times earlier and my take was it was some large buy orders that the MM was "making" to get them the best price.

However, I just re-read the PR and I wanted your take on something.

China Rail has agreed to make an equity investment in KRY at the "then prevailing price" after this deal is approved. No amount of equity investment is specified but later it mentions they will have a maximum of 19.9% stake in KRY including their convertable shares and the equity investment. Now the convertable shares are OK since they are at .40. The question then becomes the "equity investment" shares.

The 19.9% would equal between 50 million and 60 million shares. If they bougth them now on the open market they'd pay $25 to $30 million (assuming .50). If on the day the deal is approved the price was say at $2 per share, it would cost a lot more "investment" to get that 19.9% total stake.

This makes me think that there may be another motivating influence to keep the price low, which could be good or bad. If there is a minimum amount of equity investment required after the deal is done then we may be in for a long ride with little increase until the deal is done. On the other hand, if there is no minimum, China Rail would be better off buying a 19.9% stake on the open market now and they could "gift" KRY some cash and still be way ahead. They could always sell if the deal starts to go sour. I also didn't come away with the "equity investmet" meaning dillution neccessarily. just that they would make an investment and have equity in the company.

Just some thoughts that may or may not have any relevance. Personally if I were China Rail I'd start building my stake now, which would be good for us.

Thoughts anyone?