Who Stands to Gain?Perhaps someone looking to buy up to 78.9 million shares cheap?
Shareholders are not selling, at least not many of them. Total volume since the new Congo mining law was announced Jan 31, was only 33.38 million shares. That's just 4.2% of the float. The vast majority of shareholders are not selling. They're baffled.
The new mining law is simply a straw man on which to pin the blame. Blaming the "unstable" Congo government provides a handy scapegoat for the lynch mob. Blame those crazy Black people. Meanwhile the real criminals get off the hook scot free. I believe this to be true for four reasons:
1) KAT, a company that is going to take a much harder hit with a 10% royalty had a mild reaction compared to IVN, rising 6.3% on the day the mining law was announced.
2) We actually don't know if Congo will try to cancel their air tight legal agreement for the joint venture. Not only are they subject to independent arbitration, but that judgment can be enforced if necessary by seizure of assets outside Congo.
3) Even if IVN were forced to accommodate the new mining law, the penalty would not be that onerous, perhaps altering the bottom line by 10% using current economic analysis assumptions.
4) Venture Trader has been calling this meltdown step by step as the drama unfolds. He said the stock would be manipulated down through a "thin zone" all the way to $2.50 - $2.75 when share price was still at $4, and most important, before news about changes to the mining law were ever released. It's like sitting next to someone in a movie theatre who insists on telling you the whole story before it happens, including the ending.
So, who stands to gain if the chart breaks down completely? Someone who wants to buy tens of millions of shares cheap. Wouldn't you rather pay $2.50 instead of $5.00? My objective with mining stocks has always been to avoid those companies which were overvalued based on hype. That describes most mining companies. It never occurred to me that someone would try to systematically destroy value in order to obtain truly exceptional properties or shares for next to nothing. Venture Trader has seen this movie many times in the past, and we're lucky to have his input which allows us to make sense of the baffling trading action.
So, who is causing all our grief? It could be anyone. Someone very close to the Company, an outside institution(s), or just a bunch of guys looking to score. The reason I said up to 78.9 million shares is that they wouldn't have to reveal themselves on Sedi as a 10% security holder. They could remain anonymous. On the other hand, if you're already willing to break securities law, then who cares?
Now I need to watch out for two kinds of predators. Those looking to hype worthless properties, as well as those looking to destroy genuine value as a means to obtain assets by unscrupulous means. This is not a market for investors. It's a traders market. Even if you buy beat up companies of good quality, they still need plenty of cash on hand to avoid being bought out for pennies on the dollar, and then taken private. They'll make plenty of money all right, but not for the original shareholders who developed the property.