Maybe there is no up side to share price ... an opinion

Yesterday, Amazon rose $50 per share. Lynas rose 1 cent! There is a sadness in that seeing that both are near the top of their respected industry one cent was all that was gained by Lynas. LYC is only two cents a share above where it was when the reverse split occurred.

Why its price remains down is not known but I wonder if those creating this situation have given thought to a future outcome. Lynas as a company is growing, with activity in Australia and the United States. It has a large part of the world market, leading edge technology and a mine from which to draw resources for twenty-five plus years. Still, LYC share price does not reflect this. Facebook rose over $4 yesterday when people posted cute pictures of New Year’s activities. Facebook, an Internet picture parking lot went up 400 times more than LYC when the latter had a product that is needed and valued.

I don’t know who is supressing LYC. I’m not sure the purpose has been well thought out. There is the idea of holding LYC down for the major advance tech advance then capturing the stock price increase. I’m not sure that will work. Many people have given up on LYC; if you need money short term, say within the next two years, LYC isn’t where you want to be. People needing funds have sold. LYC, being held down to almost a straight line if you look at the five year chart in Incredible Charts, is an ugly duck. As Barney’s used to say, “Money talks, bulls**t walks”. From what I understand though not verified, investors in Australia tend to stay away from mining stocks. Looking at LYC, the reason is obvious. It screams of no future regarding share growth.

So, let’s say people have sold off, and others move in to buy cheap, the pool of shareholders may declne. My reasoning is that the LYC stock price rarely advances on good news, more likely suffering significant pullbacks on good quarterly news. With the pool being reduced, a tendency not to buy into a sector that pays poorly, the chances of LYC rising is nominal, at best. My proof: eight years of no gain when the reverse split is considered.

What I believe may be happening is investor interest in LYC may never grow. Those who drive the share price down to hoard may find there are few people interested in buying the stock. After all, LYC has an eight year flat record; look at the ten year Incredible Charts representation of LYC share prices. Should that happen, no one wins, short or long term.

Amazon, Microsoft, Google, Facebook and others are valued high because the price was allowed to rise. Rising prices bring in more investors who add value to shares held. Everyone holding shares sees appreciation. A rising stock price is its own best advertisement.

What must be remembered is share price has no effect on the operation of a company. Read the Annual Report and see how little effect share price has on operations. Virtually none. Lynas manufactures rare earth oxides and companies by the oxides. In the transaction share price has not part.

So for those holding back the LYC share price, realize that any gain may have already been destroyed through price suppression during one of the greatest bull markets ever. Any gains to be garnered by your actions may be fruitless in the end. It’s easy to kill something; but diffuclt to bring it back to life.