"Last PP was at $1.82 as a flow through?
So the price to the buyers is about $1.10. If the buyers are truely losing faith then they would readily dump those shares up to that price without a net loss.
However if they bought those shares with the intention to depress the sp then this is an easy means for them to not only to depress the sp but to aquire more at the then low price.
With the price depressed the stage is set for another PP at the this low level."
It is an overcast, rainy day in central B.C. today, so I have the time to debate a bit.
What I gather from the above is that these buyers would have bought the flo thru @ 1.82 with an actual cost of 1.10 (actually it was 1.23), and are now feeding them out into the market to hold it down in order to get another flo thru PP at these prices.
Hogwash to me.
Firstly, I am a big fan of flo thru financing, and better than 60% of my investments in the last 2 years are placed in this manner. However in order to participate, you must have other profitable investments to use the flo thru against, if you are to get any benefit. To use an example;
If I had purchased 100k shares at 1.82, I would have 182k to use against other capital gains. If I could use it all, I would have saved 59k in taxes last year. However all I did was reduce my cost base for the NOT shares, which I will have to account for later. If I choose to move any of this 100k shares back into the market, at or below this 1.23 figure, I am not only incurring another small loss here, but also wiping out my original 182k gain that I used at the start. And I would be doing this for what, to hold the price down so I could participate in another flo thru financing at these prices??? I suppose there may be someone out there that this would make sense to. but they would only get to do it once. Where would the funds come from for the second attempt?
Best regards
K