Gastem Inc GTMIF

Just a few thoughts

[Tbonepickens]

On December 31, 2009 Gastem announced a Private Placement that raised just over $93,000. The 93k was raised by the inner circle of Gastem (Director, Family, Friends, etc). I read  about it on Yahoo Finance. I sat back and thought for a few minutes that this is pretty good news. First of all, if management is spending their own money to raise money then the confidence in what they are doing is high and they are using this opportunity to reward themselves. Secondly, It made me think back to reading what one of the bloggers said just a little while ago. That blogger said he spoke to someone in Industrial Relations (IR) who said that shareholders can expect to hear some news after Christmas or in the early part of January on the progress the company has been making on their New York and Lower St. Lawrence properties. Yes,.....I believe we will. Under the terms of the Private Placement (PP), the shareholders bought 143,000 units at 65 cents each and receive a full warrant exerciseable at 85 cents for a period of 18 months. So......why would management pay 65 cents for shares they can pick up in the open market for 46 cents ?? The reason is because they want the security of those 143,000 warrants (attached). If, during the next 18 months the share price reaches $1.70 per share, it is a very tidy profit of 100 % when they say say "I'd like to now exercise my 85 cent warrants."  Had the company made a significant announcement before December 31, 2009 then the share price would have jumped and there is no way the financing would have taken place on the above mentioned terms. I am going to sit back and wait for some news on their drill program now....hopefully the news is positive on their flow rate tests. I have every reason to believe it will be.....because otherwise the management wouldn't be spending their own money, they'd be asking the public for theirs. Good luck to all the longs.

Sincerely,

Tbonepickens.