re: cvi sharply up on otc, page-12

re: cvi sharply up on otc For those sick of all the negative rhetoric aimed at CVI emanating through these threads...

I thought I might share a tale from one of those previously burnt here...and being asked to "move on"..." and to forget the past", by an apparent plethora of new pro-CVI posters.

I for one generally prefer not to comment at all if I do not like a stock, but on this occasion...for those interested...my story goes something like this...

As if I had not lost enough on this stock...in the week prior to the recent EGM, I bought around 5m options in the .007-.009 range...this decision was based on CVI's pledge, with full board support, that bonus options would be issued to all options holders.

Given my losses on these, I though it was finally a way to get some back.

I was surprised that so many were selling options in this period...and assumed they either did not understand the bonus options process (you get that with lots of retail interest)...or...simply were not interested in earning bonus options given the "exercise date delay" and were simply taking non-emotive profits from options bought at lower prices.

The question one might ask however is this...

Of those options I bought that week...did anyone effectively sell them to me with full knowledge the bonus options would in fact be voted down at the EGM?

In other words...did I sustain losses as a direct result of not knowing something others did? If so, were these others selling to me based on insider information?

I eventually sold these now worthless options for an average slightly over .002...and booked losses of some $32k on that particular transaction.

lol...I only wish that was the full extent of my losses here.

Now...I am the first to agree that not everything works out as we plan in the markets...in my 12 years or so of being active in the markets, I have learnt this very well...but, when we take on losses due to such grubby activity as that which transpired prior to the EGM and at the EGM itself...and I am talking about the effective "stacking" of the voting process and "punishment" dished out via the voting down of the bonus options here...well, suffice to say I for one do NOT feel particularly like just watching on as the next group of retail participants gets fleeced.

When CVI was 39c, I held well over 4m shares...I had bought them in stages all the way from 7c or so. I was in profit, happy...and now an "investor" who fully believed the "story" as it was being presented via the Company. As a Top20 holder, I became somewhat proactive in monitoring my investment, fully researching what I could and meeting with Smyth several times...as many others did...even agreeing to help out with their market presentations, after which I pretty much stopped posting my "analysis" on the stock as I previously had.

I felt the best thing I could do for my investment (the price was falling significantly at this stage under the pressure of global selling), was improve the quality of Company presentations, in preparation for their new, more professional life as an emerging "commodity basket".

Little did I realise, rather than a "commodity basket", my investment was rapidly turning into a "basket case".

In retrospect...taking on the presentation gig was my biggest mistake as I lost the capacity to read the stock as a non-emotive outsider...further, given I was preparing the shareholder updates each month, for critical periods I was often unable to buy or sell stock due to blackout rules...quite often being forced to watch on as significant selling pushed the stock lower and lower.

Anyway, as the price retraced...and retraced...initially under the pressure of selling from so-called "supporters" (Global), I transferred most of my shares over to the 15c options, mostly on the misplaced view that I would convert them and thereby further support the Company when needed by ensuring the Company would eventually get the conversion funds.

Remember of course, most of us option holders had already paid for these "loyalty options"...for me, some $30k buying spent at 4c each...lol

As the price fell further and further, I round-robin traded (when I could), as part of my usual stop-loss mitigation process, collecting more and more options (and shares), for no additional outlay as the price fell...I did this after assurances from CVI that Global were NOT selling down recent placement stock!

I eventually sold out several parcels in the 12c down to 6c range, mostly due to tax commitments at the time...thank god I did...but then pretty much held the majority of my stock till the 2-3c range...where I eventually sold most out.

In this sad and sorry process, I had turned a position of some $1.8m on paper, into about $100k...but more importantly, turned an actual outlay of some $620k of real investing funds (all bought on market mind you, except the loyalty options), into one sixth of this figure.

Losses in real terms for me, all up, are around $520k on CVI.

The difficulty I face is understanding how placement after placement could be sold-down immediately after (sometimes even prior?), to being issued...but always at prices significantly lower than the placement price!

I have never seen this in any other stock...NEVER!

In spite of this...and in spite of zero real value creation for shareholders...and absolutely NO measurable activity on the ground of any kind on our assets (other than one single solitary drill at Catabola?)...the company managed to spend some $40m+ and in the process, expand the register from about 200m to about 1billion shares on issue!

So...as an "investor"...not only was I diluted by a factor of 5 over this period...but I was lucky enough to watch on as each and every "placement" was effectively washed through the market at prices significantly lower than the respective issue prices...taking my investment with it!

Importantly...in the early days of this process the market was NOT SUFFERING FROM THE GLOBAL FINANCIAL MELTDOWN!!!

This is an important point being missed by many as they attempt to reinvent history here.

Lets not forget...CVI stock had already halved from its highs under the pressure of such selling LONG before the GFC hit the fan!

Frankly, I am disgusted that anyone could post that we ignore such behavior, effectively calling for those impacted to start a clean slate..."to get over it" as it were...that the "chatterers" are responsible for the stock not rising...lol...this is a bit like blaming victims for the perpetrators prison sentence!

I, like many, have booked significant losses on many stocks at the hands of the GFC...yet this I can accept as part of the game in the trading/investing world...interestingly, I have no ill feeling towards any of these other stocks, even though some no-doubt fell much further than they should due to poor management decisions.

CVI however...in my view...was impacted by much more than just poor market conditions...or poor management...much more.

I think this is why so many are angry at their losses here...losses that were NOT predominantly incurred due to normal market forces...to the contrary, it appears something not quite right went on with the seemingly endless selling down of placement stock...always at a loss?

Now...whether this was affected by the hands of management...or those talking the placements...or some other process...I guess we may never know?

But, to ask shareholders to simply "get over it" is both insulting to the extreme and indeed, reflective of a complete and utter disregard for the personal predicaments many of the original "true believers" have found themselves in...simply for believing what they were told via official ASX release...and often, from the Company directly.

Most did NOT lose out here due to normal market forces, but at the hands of an extremely questionable placement, then market sell-down process.

Cheers!