1. If the well is a duster, by extension so is the likelihood of the rest of the lease, as such the only immediate value for the company are their metals interests and in particular, uranium.
Given this will be spun-off via an in-specie priority allocation (we still have to pay)...the benefit to holders would be to see the options expire worthless to avoid the aditional dilution...and thereby get more of the IPO allocation...in the short term...then arrange finance equivalent to the options money afterwards?
Dirty, but makes sense...although they could have bought the record date forward to achieve this goal?
2. If the well is commercial, an underwitter (in whatever form), may actually view the options as attractive for themsleves...as such they have been selling stock, some their own and some borrowed from others (short selling), in order to effectively cash up anything over 30c to help pay for the options conversion?
Imagine being aware you are going to convert most of the options yourself...assuming you receive an average sale price of 50c, you only need to sell some 18m head shares...or if you received an averag of 40c, you need only sell 22m shares.
Your reward is some 29m options (or there abouts)...in the process increasing your position.
Also stinks...and also makes sense?
Who really knows what has driven this stock down so hard...I have certainly never seen anything like it, especially for a well apparently commercial, even if with plenty of questions marks...but there is no question in my mind, beyond the initial disappointment of poor Leadville results, the stock has been subjected to an unatural level of downwards pressure, via churn and all manner of "facilitation", which in my experience is typically indicative of behind the scenes "knowledge"...be it of a drilling or corporate nature.
The activity on the forums is simply a small part of the overall sting in my mind...what ever that might be?
None of which by the way tells us anything about the commerciality of upper gas horizons...hower may be symptomatic of the markets perceptions of them?
It's a trader for me now...until I see definative and quantifiable results.
Cheers!
GDN Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
