The long and short of it

At about 10.30am December 30 2009 an unusually large transaction was made - 1.33 million Cellestis shares @ $3.15. This transaction was later confirmed by way of ASX announcement as being a sale by 3 of the directors, links here and here.

This transaction generated considerable debate on various forums. Allegations of impropriety and insider trading were made along with estimates of liquidity, or lack thereof with the resultant dire forecasts being predicted.

The fact is that there has been no evidence of a breach or impropriety committed - to the best of everyone's knowledge the transaction complies with all current laws, rules and guidelines.

Perceptions and estimates of liquidity are irrelevant - the fact is that the buyers were able to buy the stock - therefore the stock is liquid.

Poster Alfa nails it in one;

1.3 % of the stock is now in new hands. That is by definition an improvement in liquidity, albeit not a dramatic one.

It signals 2 other things to the market;

1) Shareholding is less concentrated
2) A large investor has confidence in the stock.

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