RE: Stock Worth...THIS IS WAR ! ... so let's play war games.That's for sure Duzee, the stock is worth A LOT MORE than in May. But there are people out there who are dumping their shares to keep the free PP warrant at $2 and they think that they are smart because that is what the "smart money" does in the junior mining investment world.
Except that, in this case, they are not so smart at all because they don't know how this business really works and they may very well end up with egg on their face by killing the goose with the golden eggs.
You see, Cristiano Veloso has just declared war on the potash cartel !
He just plain and simple threatened them that he is going after 80% of the Brasilian potash market within the next 5 years or so.
Now, under normal circumstances the potash cartel would laugh and dismiss this as complete nonsense which will fade away when the little upstart fails to get the hundreds of millions / billions to finance the project which, in any case, would only account for 3-5% of the local market share at best.
Except that this time it is serious. Very, very serious.
Verde is THE lowest cost producer. It is located right in the center of the Cerrado, Brasil's agricultural heart. It does not require ANY financing. It has a new superior product that is more suited to local conditions and global market trends. It has the home team advantage and it has the full backing of a man that the locals consider to be the Brasilian God of agriculture himself !
Now how do you compete with that ?!?!?!
You don't, because you can't.
So what do you do next ? Well, although one could start imagining a multitude of scenarios and possibilities, there is really only one thing you can do to guarantee that it will protect your multibillion dollar market, and that is to take out the little bugger.
But of course you didn't get where you are today by being stupid and therefore you are going to try to buy this as cheaply as possible. So you engineer a little theater play with your friends who buy shares in the open market that others are throwing away at $1, $0.90, $ 0.80. And maybe you circulate some rumors that drive the price down even lower while you and your buddies are accumulating.
And then you launch your takeover bid ! ... 20% above last 30 days moving average. wow !
The board dismisses that, so you get one of your friends to offer a 30% premium, that way you can counter for 40%, 50% and so on maybe all the way to 100%. Of course you and your pals have been buying all along and you've managed to gather a decent chunk of stock in friendly hands.
So, in the end, you win.
You've paid a 100% premium on 70 or 80 cents, say C$1.50-1.75/share, and for a grand total of about US$ 50 million you've protected your multibillion dollar investment and acquired a great product to secure your future for another 100 years. You feel great; and why shouldn't you ? Heck, you could have paid 10 times that and still have been happy. Thank God one of those pesky Russians or Chinese did not suddenly show up as white knights !
And what about those $2 warrants that the "smart money" has been holding ?
Well, they can now enjoy the process of sticking them right where the sun never shines.
And that my friend is the only real satisfaction we'll get out of this whole story...