our friends in the uk, page-2

Ds, I've never been involved with a company that has had an equity line facility, so...

Can you explain why the financiers short the stock when they get notice of a drawdown?

I can understand that shorting= lower price= they get more shares for their financing help. But if they always sell right away as soon as they get the shares, why does it matter to them what the share price is? They're still going to make 7% profits whether the SP is 5p, 50p, or 500p as they get the stock issued at a 7% discount and sell it straight away.

If the share price is 10p, and I get my shares for 9.3p, I'm 7% up. But if the share price was 100p, I'd get my shares for 93p, so I'd still be 7% up, no?

I'm not saying you're wrong (indeed the market seems to have reacted just as you say- the drawdown gets sorted, then the price shoots up), just trying to understand what their motivations would be. Volumes have dropped off a bit in the last week so it's concievable that 5 million pounds worth of shares been released to the market could hold the price back.

I'm predicting 25p by the end of March, based on Georgia mobilisation taking place and some form of positive update on Trinidad. The main thing is we'll be spudding Georgia imminently so all the quick buck merchants will jump on board too (shouldn't underestimate this IMO- there's quite a few AIM shares that jump up quite sharply when the drilling is happening within the next week compared to when it's 6 weeks off).