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American Bonanza Gold Corp ABGFF



GREY:ABGFF - Post by User

Comment by Antennae1on Aug 17, 2012 12:21pm
363 Views
Post# 20229774

RE: RE: 52 week low

RE: RE: 52 week low

Very true.  Until the warrants are absorbed into or washed out of the system they're effectively an unknown quantity that will temporarily cap the stock.  And although some people are surprised by both the warrant expiry and the recent secondary offering, both were expected well in advance by anyone who studied the material on SEDAR (when I invest my money, I study my investment).

Many people don't have time or the inclination to deal with that level of information, so they're surprised when these sort of events occur.  And in their confusion some are quick to blame management because... well, because management is visible.  The actual targets for blame, although blame is pointless in this case, are invisible to their minds until after the events have played out.  Beyond that, some might expect a perfect world, but that sure ain't the world of gold mining.

We're coming up to the one-year anniversary of gold's peak in the $1900 range, so gold's been stagnant for a year while the stock has fallen along with gold.  No surprise there, and management doesn't control the price of gold, nor do they have an iron-grip on the stock price.  They should instead blame gold, or those who control the price of gold.

Regardless, for anyone who remembers the gold market from 2008 to 2010, during which the stock price fell below 5 cents a share, this current malaise in the stock price - all warrants and secondary offerings aside - does seem sensible, even logical, considering the fact that during the past year gold has fallen from $1900 to $1600... and appears capped at that level.  So rather than looking for targets to blame, they should simply expect these sort of events and plan accordingly.  Speaking for myself, I managed to pick off nearly a million shares when the stock fell under 5 cents - I waited for that price.  These days I wouldn't be waiting for 5 cents anymore, but there are folks who've been waiting patiently for 25 cents... and they're been waiting to buy, not to sell.  Take that to the bank.

Bargain hunters abound, and they know the stock won't be at bargain prices forever.  When gold takes its next step forward, then most of the bargains will begin to disappear.  Patience is a virtue, by the way.

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