things to comefirst of all: who would have thought that a nice little rise in the stock price of only 2 cents sparks a discussion between bulls and bears in this forum :)
it reminds me of what a biochemist once said to me about scientific progress when I was a kid: progress is like a river. There are those who like it on the one side of the river, shouting for progress and those against it on the other side of the river, arguing against it and trying to stop it. But the river = scientific progress just flows on and doesnt care about the people on both sides. Sometimes someone tries to block the river or redirect it... but the river keeps flowing and will as for centuries flow to the sea.
Same thing with this forum: some people really think with their opinion they can influence others and with this influence the stock price. This of course doesnt work in the mid- to longer run, as the stock price will move with the zinc price, with management decisions and most importantly with BIG money flows from funds and other companies.
We saw that thursday with only 4 million stocks = not even half a million USD already moving the stock price up 14%. And I guess we all agree that 1 or 5 million dollars is just a little cup of coffee in a fund managers daily life. Bigger funds were as of this summer mostly divested of Trevali. They divested because Trevali had broken the credit covenants this spring and had to warn about going concern.
We all agree and management has said and written it that covenants will easily be matched starting 2021. One analyst explicitly asked for that in the conference call and you bet these guys dont ask questions just for entertainment. From January on, Trevali therefore will again be in accordance with its credit covenants and the doubts about going concern already start to vanish as now the company stated in its latest financial reports that it has "enough liquidity for the next 12 months".
As I supposed just before the publication of the numbers, the TV stock was not blown up in one big move to 0.25 CAD, but has started a slow, but steady rise. One can see that friday, volume did not only hold, but all the rest of the stocks offered for 0.16 cents were bought in the final 30 minutes of trading. The new offers are now at 1.65 and its only 267.000 of them. Anyone wanting to invest just 50.000 USD now has to pay 0.17.
In the short term I see the stock maybe lingering around the old "highs" of 0.17 for 1 or 2 weeks. Once the stocks offered at this price are taken out and all the investors offering their stocks at these prices have sold them, the stock price will be taken to this years highs at 0.25.
Dont underestimate some more good news coming from the company till year end. One commentator a few weeks back wrote: the election of a permanent CFO alone will boost the stock price. As I said, I dont believe in a "boost" in the stock price, as I would define a boost being a more than 30% rise in a day. But the company has stated that they re searching for a permanent CFO and you bet they will appoint one. This and maybe some more news will add to attract back the confidence of institutional investors and give the stock price the "fuel" for the rise back to 0.25
Not to forget the "massive positive cash flow" for Q4 that will help to bring debt down. Bringing down debt further attracts new investors and also brings down interest payments and total costs.
If someone would ask you what kind of stock you should buy in a rising zinc price environment: you d probably say... if you wanna play it risky, buy stocks of a company that was formerly unprofitable, on the verge of bankrupcy, has a high but still managable level of debt and a great management team with a consistent plan for the future.
Bingo :)
Every cent the zinc price rises offers great leverage with Trevali as it brings debt down, attracts new investors, offers the possibility to reopen Caribou and brings the valuation of the company back to book price.
Right now we re at 35% book price.
Whoever believes the company will dilute shares at the current level, also believes in an incapable management. Ricus has said it twice in the conference call: the company is in no hurry anymore. And therefore in no need to give the company´s shares away for a 60 or 70% discount to book price. Thank God.
Those of you who were patient in September with the share price at 1.125 have already been rewarded. So guys, once again: RELAX :) Lean back, light a nice wood fire, have a good glass of whisky or wine and take care of your wife/partner/kids/friends for a few weeks. TRUST in management. And once a week you check the stock price and hey.... :)
A year ago, a friend of mine said to me: "dont boost your ego worrying" - that made me think. And its true, that sometimes worrying less also means to be modest, to accept your own limits. Those of you who divested from Trevali: ok - you sold it - you ll watch from the outside now. But be consequent now and stop worrying as that was the reason you sold it. And those of you holding or buying the stock: be consequent and trust in management to be a value creator for all stakeholders - including yourself.
A good weekend to ALL of you: ENJOY :)