Thoughts on last week's tradingHere is my wild Sunday morning guess on last week's interesting trading. I didn't talk to management or anyone else that actually knows what's going on, so this is just pure speculation on my part (this is what these boards are for after all, shooting the bull..).
-The news that Pacific Hydro has sold its 6 million shares to what appears was not a single but a bunch of new shareholders assembled by Loewen Ondaatje McCutcheon is very good news but should not by itself have driven up the stock to about $3 on very heavy volume on the last two trading days, even if it closed lower on both days. This is not a 'material' good news, i.e. no new contracts or financial results were announced, just that a large chuck of shares switched hands. After all, over the years I've seen apparent 'material' good news from WND followed by very little movement of stock, both in volume or price. Also, a cross generally does not drive stock prices that high that quickly on heavy volume, particularly if it's done between one large shareholder to another since the new shareholder would a) have his 'fill' of WND shares and have no great need of buying more and b) even if he wanted to buy more would probably be limited, like PHL was, by rules on the amount of shares a single shareholder can hold in the company. However, I think it's pretty clear here that we're not facing a single new large shareholder but a bunch of them.
-What was interesting is that, even if I did not have access to at all the trading data (only saw limited data available for the last 20-30 trades of the day when I came home at night), I did notice large buys (50k shares+) by Loewen Ondaatje McCutcheon, which probably means the same group of clients that benefited from the cross with PHL at $2.15 were still buying at much higher prices. Combine this with the statement from WND in the NR that "This great effort by LOM brings a diverse base of new shareholders and removes the perceived market overhang that was a limiting factor in the upward movement of Western Wind's share value" may mean that we're looking at a bunch of new large shareholders who were convinced of the long term value of WND but collectively held off buying because they wanted to get the cross at as low of a price as possible. Now that the cross is done, they're free to buy to their heart's content!
-What's also interesting is the way the trading is done. I've noticed at least 3 or 4 "waves" over the past few days that's driven the stock to $2.90 - $3 in a few minutes on very large volume. Then the stock will fall back on lower volume in the 2.60-2.70 range. This is unusual trading to say the least but look like very calculated moves. Somebody, who again may be acting on behalf of a large number of clients (I really don't know if it's LOM because I did not see the trading data when those waves occured) badly wants lots of WND shares but doesn't want to go about it the traditional way, probably fearing that this would drive the shareprice even higher and faster, since we can see from the data that a bunch of smaller shareholders are also jumping in on the action.
-Combine this with the constant hint from WND that it "is currently engaged in advanced negotiations regarding the financing and build-out of over $350 million of capital investment in wind projects at the project level", emphasizing that "The sale of corporate equity is not required in US project finance structures. All equity and potential debt facilities can be done at the project level allowing the corporate parent, Western Wind Energy to remain dilution free during this capital-intensive process" and you know that a bunch of large shareholders really want those shares before the news comes out, and we might be looking at a sequence of really important 'material' NRs over the next few weeks and months, knowing that no else now has an interest in keeping the share price down...
-Conclusion: for the first time in years of following WND trading, I feel that this is much more than another blip, this is for real, some key buyers know what's coming, and this thing is headed for $4 easy within the next few months, maybe more depending on the nature of the news we're about to get. But hey this is just my Sunday morning guess...