We all know that Capital Raises are all part of the journey of exploration stocks. We invest knowing about this risk, otherwise we would only be investing in companies making bank like the big gold producers at the moment. Funnily enough, even they are struggling for reasons explored below. The problem is in this horrid market, exploration companies do not get share price spikes like they used to. In the past (pre-Covid Imo) companies would release good exploration related news or acquire new tenures, do deals etc and the share price would respond positively, and the market would get excited and there would be a sustained uptrend for a period of time. The company could then go back to the market and raise capital - investors were keen to get involved knowing that it meant more exploration was going to take place with more capital, therefore more good news and more share price gains. This meant that most raises in any decent exploration play used to be oversubscribed. Now it is a totally different situation. Not many exploration companies share prices are responding to good news anymore. Not a lot of exploration companies have fully or oversubscribed raises, maybe the West Arunta plays in recent months but even they are running out of steam in the past fortnight. Because capital raises are now not as responsive from the retail market, the institutions get even more weight in the game, they get all the shortfall and are paid a pretty penny for that risk! Yet they also make bank off it with what they do after.
The ASX commodity sector right now is absolutely horrible. Never seen it worse. Don't get me wrong, it is not just DRE! The institutions have even more power and can do as they please, loan out shares, offload parcels at key periods to spook the market and get stop losses hit, knowing they will then likely be the beneficiary to make decent coin when the company is forced into a low ball, heavily discounted capital raise which they will happily gobble up to make even more money. The game is rigged! They are always a step ahead. It is ok in the good times and not as noticeble because there is a level playing field, the retail power and liquidity evens it out. But right now, in the cost-of-living crisis, with Albos Australia in a blood bath, companies going into administration left right and centre, record immigration putting more and more stress on energy, housing, services etc. No wonder stagflation is taking hold. Don't worry, you will not hear about it in the mainstream media, inflation is easing remember... just go to the grocery store or check your next energy bill to see how much it is easing lol. These issues come from the decisions at the top, and Imo they are clearly planned. Nobody can get all these policy decisions so horribly wrong accidently. I remember all those WEF-affiliated elites arriving in Australia and meeting government ministers in the lead up to 'The Voice' referendum decision - Obama, Gates, Soros son etc. Apart from the global wide Covid pandemic a couple of years earlier, The Voice was the start of them trying to destroy our society from within IMO. You will own nothing and be happy! Add in all the attacks on good old cash! The Great Reset and transition to a fully controlled government digital world is getting closer by the day IMO.
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