Sulliden Gold Corporation Ltd T.SUE.WT

RE: another sell off

[December3]

Looks like we have another sell off today, anyone know why or is this normal since the stock not too long ago was at $1.?

Well think about it....  You are a BIG investment house, designed to make money and mitigate risk.  You hold a BIG pile of SUE Warrants and just received notice that you have to come up with a pile of cash in order to monetize your "investment" in those warrants.  What would you do?

I suspect that the BIG investors look at a $2+ stock price as a gift.  They sell SUE shares short here and put the $2.20 per share into their pocket.  Then they turn around and give the $1 per share back to the company to exercise the warrants.  When they get the new shares, they use those shares to cover their short position.  Case closed, $1.20 per warrant profit in the bank, risk of SUE faltering and effecting their "investment" - ZERO. Risk mitigated.

Remember the guys that got the warrants are the guys that got the stock in the PPs.  So if they wanted more shares, they probably increased the number of shares they bought in the PP.  They are not looking to convert warrants and hold shares.   Most of those guys, will wait until the hold period is up and sell the shares at a profit if they can.  If not they try to at least get their money back.  That leaves them with potential "lottery ticket" with the warrants.  So now that the "lottery ticket" has come due - they will be happy to cash it in and take the profits.  Selling ensues.

But the nice thing about the notice is that it came BEFORE the end of the year, thus allowing the BIG investor to tax plan his short sales and warrant purchases.  Perhaps it was advantageous to some to do the transaction this year, perhaps other will defer to next year for tax purposes?

So under that scenario, there could be 22MM shares worth of selling until the date those warrants expire.

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