RE: ETF selling, more to come.Well, damn, Flapdoodl--this DOES explain a lot.
Five things about this strike me. First, this sentence from Metal Augmentor:
"Earlier today we spoke with the person responsible for keeping track of the Market Vectors Junior Gold Miners Index (MVGDXY and its dividend-reinvested equivalent, the MVGDXJTR) and confirmed that East Asia Minerals was removed as an index constituent due to a valuation uncertainty surrounding the complex spinoff that was set into motionback in March 2011."
This is stunning, IMO. Based on news of the spinoffs, EAS was removed from the Index?!?!?! WTF? Idiots! This kind of thinking is why I don't invest in index funds. Know what an index is?... A bunch of stocks chosen by a committee. And we all know how bad committees are at EVERYTHING. Dumb a**es...
Second, I wish I knew the exact date the Metal Augmentor said that GDXJ had around 1.2mm EAS shares left to sell. Because as of yesterday's close, they are now down to 1.0mm shares. (There is an Excel spreadsheet listed on their site that provides this information, at https://vaneck.com/funds/GDXJ.aspx?utm_source=google&utm_medium=cpc&utm_campaign=gdx&gclid=CPHUv7fJqaoCFQJrKgodOV3bVg.)
So, if GDXJ held 1.2mm shares as of Thursday's close, it means--given the 192,500 EAS shares that traded on Friday--that virtually ALL OF THE SELLING ON FRIDAY WAS DUE TO THIS ETF!!!!
Third, I'm confused by a conversation I had with Nick Kohlman (Investor Communications contact for EAS) on Wednesday, in which he advised me that an index fund was selling EAS because EAS' market cap fell below $350mm for 30 consecutive days. In that conversation, I offered that my guess was that it was the Market Vectors Junior Gold Miners ETF, and he advised me that it was a different one. (He gave me the name of the ETF, but I don't remember it; I've emailed him for clarification.)
I can't help but think that there is only one ETF selling, not two; as that would be significant enough. However, if indeed there have been TWO ETFs mechanistically dumping shares, well then, good Lord, that would further explain why EAS has been crushed in recent months.
Fourth, I vehemently disagree with Metal Augmentor that the spin-offs should stop. Whatever else folks have to say about Hawkins, he assembled the best and largest packages of Indonesian exploration properties when no one else cared. (EAS is in the "land of giants," too; it hosts many of the world's largest mineral properties.) The company has had enough properties for five or six juniors to handle, IMO. The spinoffs are exactly what should happen so that... 1) EAS can focus on developing Miwah; 2) the spinoffs can focus on the many outstanding properties that haven't been paid as much attention to; and, 3) some major gold company doesn't swoop in and get those additional amazing properties for damn free, by buying EAS.
Last, and now perhaps most important of all, this bombing of EAS cannot continue. Whether it's one or two ETFs that have been crushing the EAS stock price, they will eventually have no shares left to dump. The damn GDXJ now holds 1.0mm EAS shares--they aren't going to be selling another 2.5mm shares, period, let alone in one month!!! This selling dynamic will reverse, too, when EAS is again put back into the index.
The entire episode amazes me, and reinforces my notion that now is a shockingly good time to buy EAS. Warren Buffet has said, "You pay a high price for a cheery consensus." Well, the converse is also true--you pay a low price when all hell is breaking loose and blood runs everywhere. As an investor, too, if you can manage to pay a low price for a company that has an amazing property (or properties, as the spinoffs aren't all completed) and has excellent people involved, you have the conditions set for a super investment. These conditions are exceedingly rare in the investment world.
I think EAS is such an investment, right fricking now.
DYODD and GLTA!
(Sorry for the length of this post and for for any typos. I would have written a shorter one, but I don't have the time.)