Some thoughts on today...Today was an unusual for GSM. There have only been four trading days since mid-August (or, over six months) on which the volume has exceeded 200,000 shares on GSM shares. Today was one of them--267,500 traded. What's interesting is that that volume--as rare as it is--represented just $34,000. Here's the key: this stock is so thinly held and so depressed that $34,000 moved up the ask by 22.7%.
THAT begs the question: What happens if GSM hits anything at all with their upcoming drilling? The thing is that GSM now has the best chance EVER of hitting something, because they finally have funding coming in for Monte Cristo (MC).
So, here's where we might be at the moment with this stock. Because of the past, most investors have given up on GSM. Even as the gold price marched up into the $900s, GSM's stock went DOWN. Now, at its nadir, when it is the most unloved and investors couldn't care less about the company, the prospects were/are the BEST because the company finally has the funding to find more gold. And still the stock sat still.
A few folks not only still believed, but invested more during this time. International Bethlehem CLEARLY believes, as they are committing $3,000,000 (which is 1/88 of today's dollar volume) to drill MC. And even that much gets them HALF the value of MC in a JV. I was lucky enough to get more units in the recent PP, which was oversubscribed. As it turned out, Pinetree was a big investor and wanted more, too.
So, here we are. At the darkest moments based on immediate past, the stock foundered. But some relatively big boys--Pinetree and International Bethlehem took advantage. Now, it's up to individual investors to decide if they want to get on for the ride, too.
Every investment is a balance of risk and reward. I think the risk is pretty much already priced into the stock; GSM's properties are too good for the stock to go to zero (especially with a rising gold price). I suppose the stock could gradually grind down again if they don't find more gold. Conversely, I think the reward is potentially stupifying. At this price, I'm taking that risk. I don't have all my portfolio in the stock, but I have a meaningful chunk (over 10%) allocated to GSM shares. I look forward to the day when the REALLY big boys move into this stock. What a ride that will be.
GLTA!