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very educational, thanks Hera, so the risk down here is if the...

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ambledream

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12/10/16

17:58

Post #: 19810757
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Originally posted by Anton Chigurh ↑

Are you new to this end of the market? (genuine question)

As far as I can see, it's playing out about as typically as you could possibly expect.

- Company runs a placement to raise capital.
- Placement is at a discount to last traded (rare to see a company raise above the last traded price and a discount ~15% is pretty standard, otherwise, where's the incentive)
- A % of those who take stock, flip on to market for a quick profit.
- In the days/weeks following the placement, we see mini rallies, where, more sophs flip their stock for an easy 10, 20, 30%.
- While all this is going on, various traders, brokers etc soak stock up, in anticipation of a larger move
- At some point in the weeks/months following the placement, price sensitive news (acquisition etc) arrives and the larger, more sustained move arrives, creating plenty of liquidity for the remaining placement stock to exit (or remain, if they are bullish on the announcement)

As said, nothing sinister happening here and in fact, it's about as cookie-cutter as you can get. At this EV, it's a cheap mining shell. You either hold out for the key announcement to arrive and ignore the intraday moves, or chance your arm as a trader vs the rest of the market (including traders that likely have much more stock than you and therefore influence over the price).

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very educational, thanks Hera, so the risk down here is if the company dont looking for project and spend money on their current work, then the announcement will not make the company sexy??

regards,

EYM Price at posting: 1.1¢ Sentiment: None Disclosure: Not Held
2 Upvote

0 Great analysis

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