My Biggest Worry Isn't the ShortsIt's that Company insiders will increase their percentage of share ownership through a fire sale equity placement. If management increases ownership at the $5 level, that still creates shareholder value. If they add generously to their position at $2.50 or $3, insiders increase their overall percentage of ownership, at the expense of retail investors. There certainly does not seem to be much resistance against the relentless pummelling IVN has received since November. It may be a case where management wins either way. If it goes up they win. And if it goes down the sewer they can also win. Retail shareholders need not apply. It could be very difficult to get in on the placement. I hope this isn't the scenario we're looking at. That would be so disappointing. Retail shareholders have really put up with a lot, and deserve a better fate than that.
The price action worries me a lot less. Operators can run this into the gutter, and there is still incredible intrinsic value, which will eventually be realized. There is zero chance the highest grade, bulk tonnage copper, zinc, and PGM projects won't get developed. For example, the market could decide a Tim Horton's franchise is only worth $25,000. Does that mean someone wouldn't pay $30 K, or $50K,or $250K? It's the same situation here.
But management calls the shots. Who ends up with this winning lottery ticket is up to them. I'm more than a little interested in their financing plans going forward. Whose side are they on? Are they on the side of retail investors? There are three interested parties here, not just two. There are the shorts with whatever agenda they have. Then there are small retail shareholders. And finally there is management. I'd like to believe management and retail are on the same side.