Globetech Ventures Corp GTVCF

Update

[windmere0]

Globetech 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.