Metanor Resources MEAOD

Management vs. SP… a turning point to purport .40?

[sapiensunus]

All this talk about .40 makes me feel like writing. Should have been at .40 last year!!!  We need POG 1500+++ for that to happen. This, combined with slow moving management, is why it’s taking forever to get there.

During the most recent sprint we almost made .30. The pump was good… but as it was mentioned it appears Sprott was involved with some kind of transfer as indicated by the period of huge volume. However, the good news is there was a buyer at those prices. THEN MANAGEMENT DID WHAT THEY SAID THEY WOULDN’T DO…AGAIN.
Here’s a little piece about the adverse effects of share dilution that I posted on GHG, but is also relevant here.

PP's...
 
Regulators should force management to have shareholders vote on PP’s before they are issued.

Private placements should be more carefully scrutinized… or better yet made impossible by regulators. Think about it…since when should public companies be able to make private placements? Private placements are what private – not public – companies usually do. What interests me is the fact that PP’s are little more than back door deals made public after the fact and basically are a slap in the face to current investors because they always involve dilution.

What’s good management?

Avoids PP’s and uses shareholder’s money as if it were their own. They buy back shares (and buy some themselves) when they become undervalued as indicated by RSI and MACD (for Gramps). Good management would rather use external credit sources that don’t involve dilution. They form a relationship with a capital source and get good interest rates (MTO should be able to make a better deal on their rates). They have a minimum of a two year plan and never go to market unless they are able to grind an income out of the initial PO.  They avoid further dilution until a profit can be foreseen or accomplished.  They do this even if they have to take a pay-cut. They will do what they can to make sure they will achieve their goals without dilution to existing shareholders.

Typically what’s done by management of juniors on this exchange and other small cap exchanges…

1.       PP’s are thrown out at will or when they need more money because they wasted what they got on the last one.
2.       They borrow more money “just in case they need it” without a real plan and use shares as a piggy bank.
3.       They use the word “tranches” in an effort to make it less painful for existing holders.
4.       Always leave a window open for further dilution.
5.       Build-up the share count to so many shares outstanding that they end up reverse consolidating over time or worse yet offering sweet deals (as an example warrants for .15 for 36 months for GHG). That’s disrespectful to current shareholders and a bargain for the back door deal maker.

In the end it’s up to regulators to protect the shareholders… the problem is they do not have the resources and share dilution is legal. Just something to think about before investing in such stocks… there is a reason why exchanges like these are suffering and the stocks within are languishing. When doing your DD, check out when a company last PP’d and the frequency – that’s a good indicator of what management thinks of the shareholders.

GPT…do you ever check your in-box?
 
GWH