Speculative stocks are prone to rapid fluctuations in price by virtue of the fact that they do attract speculators instead of investors, that is, people whose risk management strategy is based upon a very short time horizon and the extensive use of sell-stop orders. These sell-stop-orders can cause a chain reaction leading to a rapid unwarranted fall in the stock price.
What in my opinion seems to be crucial is to know if the purchase was somehow conditional, something that it seems not to be clear. Or to put it in another way, to what extent, if any, can the recent events in Korea render the contract unworkable? Can they be considered, if need be, a force majeure? And what would be prudent to do while the situation in Korea stays unclear?
At the moment, all that we know is that the seller feels disappointed and that his interests do differ from those of the buyer.
Let's see what happens during the next few days.
PGY Price at posting:
0.5¢ Sentiment: Hold Disclosure: Held
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