Alright, you characters, I just made a callI needed to speak to someone at Canaccord to find out a few things. Here is what I was told. First of all, this financing deal would have been thought out a long time ago, as in months. It was planned by management of CAN, of course.
This is basically to benefit them. Before you shoot me, I hope you all realize that 2 insiders sold 8 million shares each.
If you have confidence in your company, then maybe you would sell a couple of million dollars worth, but 40+ million dollars worth each? Yeah, open your eyes. This is like phase 1, the build up, the time to enrich those in the office, who usually unload options or stock at the set price, in this $ 5.40, and say thank you very much to those on the street that are buying.
So, because it was set up far in advance, the stock is run up to a price point that allows the company to reach their price target, plus the percentage given to those doing the financing, I think in this case 5%, and once it gets there or beyond,
as it did in this case, then the deal is announced, and a short is put into place to hold the stock in a price range that allows Canaccord and/or TD to unload their stock. So, the stock is now in the marketplace, it has been bought by others such as mutual funds, etc. Canaccord and TD are out, they have their cash, the market has bought, the stock is diluted, and the insiders are laughing because they don't care if they have the goods or not to a certain point. They have what the game is all about, and that is money.
So the stock gets supported for say 2 weeks or so while the short is covered in the marketplace, and then the stock is on it's own. Usually, it drops after that period. That would be towards the end of next week. Let's see if that happens,
or if the company brings out price-supporting news and facts to carry this game on.
Some of the guys I spoke to didn't like the deal, and didn't take any stock to sell to clients. I was quite shocked at this.
So you see, folks, people who sell and handle stock see it simply as a way of making money, selling to prospects
that read this board or listen to their broker, etc,., or who believe the hype, and then buy while looking up all the time.
So now that the company HAS the money, the question is, do they, and will they truly prove up the goods?
Those in at these prices may be in for a longer wait then anticipated.
Sorry folks, don't shoot me. I don't like to hear this either, but it's truth from their lips to my ears from folks that see these kind of secondary offerings all the time.
The only question I have, and it could be the most important one regarding all this money, is that it may have nothing to do with drilling, but actually might be for a very large land acquisition yet to be announced, which still means the company has to move forward, drill, and put out consistently good results to keep this moving. It's a tall order at the best of times. Of course, I'm hoping for the best for all shareholders.
Cheers