Okay, I will say it: this placement is the right move at the wrong time.

Look, I have been around the juniors long enough to know that one phrase will NEVER been spoken at the boardroom table: "We must do the right thing for the current shareholders..." Period. Big money rules this market and management will cater to the big boys even at the short term downside for the retail shareholders that own the majority of any company. Once we all understand that, then the rest of what goes on makes more sense. I am not going to rant at length on what is right or wrong. It just is.

So this move today to allow a big chunk of stock to Sentinent Group can be interpreted many ways. Yes, the market is uncertain and the option to raise more money now, and have the next phase of development fully funded seems like a very conservative move. The main participant is an institution that supports the company and will not be selling all the paper shortly into the market. That too is positive.

My take is that this was agreed to in principal a couple of months ago, while AUM was trading at higher price levels. And therefore I believe much of the selling pressure during the last few weeks has been geared towards trimming down the share price so that one connected fund can get a bigger chunk of ownership for less money. I know that my opinion will not be popular on this board, but money talks and nothing is free in this world.

This deal could have been done immediately after the merger, when the stock was still above $12 a share. There is nothing about AUM today that was not also true about the company a month ago. There is no urgent pending need for funding today that means the company could not have said, "This is not the right time to send the message that we are rewarding an insider institution with a sweet deal."

AUM has plenty of cash on the books. Contrary to what others have posted here, the burn rate is not an issue. They can comfortably continue with the stated objectives and have all the money they need for the next year or more to pay for it all. So why do a financing at the lows of the last year, while the entire sector is in trouble, with a connected insider institution, at a price that is very attractive?

Been there, seen this too many times before. It is what it is, and I am not going to sell a share because I expect the long term is worth the slap in the face that has just been issed to all current share holders. I bought more stock at $12.75 after the deal closed. Tough luck for me that I am not a big enough fish to get the tip that the stock would be walked down for a sweetheart deal.

The guys at Sentinent are pretty smart. They would not put a penny into this company, at any price, if they did not think that the stock would go a lot higher. So its bullish that they are in this deal, and no doubt the company is going to be stronger with a fully funded treasury. And no institution is ever going to say: "This is too cheap, lets walk the stock higher and buy at market until the price we pay is more fair to the existing shareholders." Management could have stated: "We want you on board but we will not raise money at this price range unless we absolutely needed the cash immediately and it was the best deal we could get." It is what it is folks.

At least now we know why AUM was getting crushed, and now that the promises have been kept and the funds have all the cheap paper they want, I think we have a chance to see the value of this stock recover. I have the same feeling today that I usually have when I send off a big income tax cheque to the government: I am getting screwed but its the system and there is not a goddamn thing I can do about it.

Cheers!

mike