Re: The stock is taking a beating
in response to
by
posted on
Apr 13, 2010 03:43PM
I think that is a fair point. As a shareholder I'm glad they are not putting out puff pieces to try to buoy the share price; I would be highly skeptical of that.
My concern is deliberate misinformation or inept management of expectations more than it is lack of information. I have now sold about half of th 75K shares I once held because I saw this drop on the horizon. You can't fail twice to meet a production milestone and expect the price to continue to rise especially when you fail to make clear your intentions and force investors to guess.
Everybody here seems to think when they announce the wengfu deal the price is going to rise, but I tend to disagree. There will certainly be dilution; I understand that there will be a commitment to invest by the Chinese, but I don't think that will offset the financial reality that the shares have been diluted.
The market cap is already over 225M or there abouts. Let's say there is about 50-60M in the bank left. That leaves 175M over cash on hand. What is that 175M premium buying you; no infrastructure, no permits, no production on the near-term horizon. So there is 175M buying mineral rights to ore that cannot be profitably extracted at today's prices and a potential deal that may lead to profitable production in 2 years plus some piddly subsidiary holdings. I'd say that current price is fair to overpriced.
I'm gonna hold on to my current shares because like you all I believe that one day they are going to transform this into a going concern, but unlike most of you I don't think it's going to be anytime soon and I don't think we are going to see much in the way of appreciation over the course of this year and perhaps next.