schreef:
Having been in the share-price business for quite a long time (now retired), perhaps I might suggest some reasons why the market seems to be increasingly nervous.
First of all the recent press release listed some conditions for a restart of production. One of those was the acquisition of additional short-term funding. Why? That implies that even after the recent deals there may still not be enough funding in place to keep the salaries paid for a sufficient time to achieve a cash-flow surplus after production start and at the same time to satisfy the demands of the suppliers. This, despite the long back order book.
Also, reaching agreement with ‘some’ of the suppliers isn’t anywhere near enough. How many – a third, a half? Of course it has to be all of them. There is little point, for example, in making and shipping cars without door handles. Saab has had three months to work on what is required by each of its suppliers and should know that by now. If agreement has not been reached at this point it suggests that a much more fundamental supplier problem other than debts and payments may exist. There may be some critical suppliers, which Saab simply cannot replace in short order, who absolutely refuse to tool up, or gear up, to supply Saab again until long-term institutional funding is in place.
Efficient markets react to discount what they believe to be the most likely scenario, not just what they are told by press releases. It also does rather suggest that if the Chinese do not get regulatory approval, then Saab’s condition is probably terminal. No wonder the share-price has been falling.