Noranda Income Fund Unit T.NIF.UN

RE:RE:Why is this stock tanking

[Bigbird999]

My theory/thoughts written from the point of view of somebody holding X thousand shares with an average acquisition cost of $2.50 and 50 years in the Zn refining business are:

• The vast majority (maybe as many as 80 - 90%) of the 37.5 million shares are not currently being traded,  They are either held by folks that bought at ~$5 or after it crashed (at $2 - $3).  The $5 crowd is collecting monthly dividends and waiting for a buy out or the SP to recover.  The $2-$3 buying crowd is doing the same thing but with a much bigger upside.  I consider these people to be investors.
• The trading we see (60,000 shares per day) represents <0.2% of the 37.5mm shares issued.  Have a look at the daily trades the price is being set by many (think hundreds) of trades of 100 or 200 shares with one or two trades of 10000 shares.
• I believe that stock price is the result of the buying and selling of the same 3 - 4 million back and forth between the day traders and manipulators who are happy to take a 10 or 20 cent gain for a few day or weeks of ownership.  If they buy across the ex dividend date they can add another 5 cents.  And then do it all again.  To me these folks are not investors.  They are traders. 
• We know that there is no large short interest (IMO, it would take a very brave person to short this stock).  On one of these cycles, the price will rise and the shorters will get slaughtered as they chase the stock to cover their positions.  But it is obvious that somebody keeps beating the price down.  We don't know who or why (or at least can't prove it) but it is clear that it is happening.  (Jkay's post about the keyhole views comes to mind)
• I am pretty sure that each cycle when the SP moves up and gets beat back down, a few more of the "not for sale" shares enter the "I'm out of here" category as people panic and sell out of fear that the SP is heading for zero.  As often discussed here, the likelyhood of this is miniscule to non existant.

Each share that moves from the "not for sale" category puts another share in play for Glencore, the manipulators and traders to, well, manipulate.

Said before, saying it again, eventually we will see an offer at something approaching the real valuation (somewhere north of $4.50) for the enterprise.  Or a renewal of the SPA at market terms and a SP that reflects a sustainable dividend of 50 cents per year (~$5).  In the meantime collect your dividends or do your DRIPS. 

Hang in there folks.

BB