RE: The reason why SWN SP is fallingKruzer: If this theory was reliable and valid, there would never be such a thing as a mispriced asset or under/over valued stock. We , of course, know this not to be the case. We do have a major value discontinuity here. The deposit valuation will always dwarf the value of mgmt since mgmt can always be replaced quickly(except for a exploratory jr who has not drilled up anything yet)
Joe: You are correct, I should have used the word valuation instead of value. I never intened to imply that there was and X+Y=Z relationship. You are right there is a disconnect but rather than beive the market is wrong I prefer to look for possible reasons why the disconnect exists.
Markets tend to discount a companies value out into the future (I've heard some say it's around a year or so). Looking out a year I can see the resource being larger but I can't see how the company can raise the cash needed for the next year without either serious dilution or selling a stake in the project at an unfavorable valuation.
To me this would explain the lack of buyers as anyone considering this stock has to know that it would be better to wait until after financing is arrange before buying in (if not able to participate in a PP). A current shareholder has to expect that either their owership is going to be diluted down (in the case of a PP) or that a chunk of their interest in the deposit is going to be sold at relatively unfavourable terms (in the case of a JV). Looking at YZC and SWN it has to be concern to any shareholder or potential share holder that Dr. Meade has no problem with massive dilution.