RE:RE:RE:A few things..... "$20mm is a SMALL deal in the scheme of things. "
After reading your first post that was the thought that popped into my head first as well. This is not a transformative deal. What Buffalo brought to our attention yesterday is that it is a pretty mundane, business-like deal to fund the next step on a long developmental path. Why should there be a mad scramble to get in around this event?
I think you are right. I think this is a low key, low impact event. Whether it could/should have been more than that IDK. Let's see how it pans out. Seems to me it's possible the company knows what it wants from this deal and hasn't pushed for much more than that. This is the aperitif, the main course is yet to come.
barcodewhiz wrote:
$20mm is a SMALL deal in the scheme of things. The stock broke down approx 40% off its recent median higher range ( $3.35 -$3.60 ) and is now approx 25% below its 200 day moving average ($2.60 ).
Are there broader market sentiment factors .... for sure.
But when you bring two global Investment banking powerhouses to the table to do a bought deal, effectively endorsing your company, you need to have a well polished story, plan and script to land the Institutional investment clients that you want involved to support your company.
You need to be able to answer the tough questions and come away with a completely realistic take on how your presentation was received. The ultimate " tell " is whether the guys you pitched participated in the deal... and if they didnt, you need to understand why.
Given the overall backdrop, the incredibly unique and attractive asset this is, one would think if you answered the tough questions correctly and adequately addressed the risks both real and percieved, that you would get significant participation, and the after market would reflect that sentiment.
I would argue the market has been telling you for a month or so that a financing was coming based on how the stock was trading. Particularly the breakdown below the 200 day MAV. When I saw this deal announced, and the stock had closed up at $2.29.... I was expecting follow through buying and a bounce back above the 200 day MAV. I assumed there would be significant institutional uptake and the deal would be tight in retail.
The broader market has had a sustained bounce rally, risk asset values bounced, and FL has gone down and been sloppy in the face of all of that.
When was the last time these guys had a conference call ?? or management discussion call ?
Why were they at the bottom of the timeline on Cannacords recent review of Lithium opportunities in Canada, actually contrary to their own guidance ?? POOR or non existent COMMUNICATION
To me the answer is clear. These guys need professional Investment Relations. They need to polish and clarify and justify their strategy and story.
I absolutely love how and why they got to this point. Almost everything imagnineable has gone right. But now is the time to move this meaningfully to the next level and to properly navigate and execute on this great opportunity. I would like to see considerably more urgency.
Qwerty, I am long, and likely buying more. But they have made some pretty basic avoidable mistakes.