GREY:GTVCF - Post by User
Post by
windmere0on Dec 11, 2003 3:18pm
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Post# 6770361
Update
UpdateGlobetech Ventures (GTVCF:OTCBB) $1.08 - $0.42 on 1,172,800 shares,
which is more than eleven times the average volume. . The stock ran up to
$1.65 and then the selling started. The first hour was very heavy
volume and was pushed down to $1.01 by noon. The last four hours of trading
the stock consolidated in the $1.01-1.20 range on much lighter volume.
There were several factors that lead to yesterday's drop in the price.
In the press release, people failed to read that the company acquired
the gold property for RESTRICTED STOCK. The sellers are limited to
registering 200,000 shares every 6 months starting in September of 2004. The
stock used in the purchase was valued at $1.50, which was more than
twice the price of the stock when the contract was agreed to. Normally
such deals are done at a discount of 25-50% to the current price.
Globetech's management negotiated a price that was a 100% premium to the stock
price at the time negotiations were completed. Many people thought a
slew of free trading shares were hitting the market and sold their
shares. The stock had also risen from $0.38 to $1.50 in 9 days so there was
also profit taking. The after was characterized by consolidation of the
price. I think as people read the press release thoroughly, they will
see what a good deal this was for the company and its shareholders. In
speaking with the company after the close of trading, there was no
change in their outlook and my opinion remains the same.
For Thursday trading above $1.20 should bring on more buying and above
$1.35 should take us back above $1.50 and then higher as we get more
news and the larger buyers come into the stock. I see yesterday's
volatility as a reaction to the events mentioned above along with a general
down day in gold stocks. I recommended that the company resend the press
release with an additional emphasis on the fact that no free trading
stock was involved in the transaction. The first hour or two of trading
on Thursday should tell if my assessment of the situation is correct.