RE:why raise more money at such a low price?shiftyone wrote: They must have a bunch of results by now. Aren't we all expecting that when tax loss selling ends, and they announce the drill results of a probable third pit, that the price should be much higher in January?
Isn't it a better time to raise money when the shareprice is much higher?
For those in the flow through pp, SGNL gets .17(loses some forward tax advantages), but the buyers of the flow through pp get warrants and it only costs them about .10 after tax breaks.
Why not wait until January?
puzzles me. There is one CEO that I have monthly contact with... he tells me you have to raise the money while you can.
Your post merits some pondering and is worth an answer Shifty. Let's speculate a bit.
Context: Management took risks in the past not raising too much money as the equity markets were "bad" (Kevin mentionned that a couple of times). Well, they were certainly worst then bad in the last year. They tried to promote the stock with excellent news in the past but it seems there was no way to fight against the Lassonde curve. They made a deal with Nebrari to avoid going on the equity markets while they were trying to sell Point Rousse assets. Well, it turns out that a lot of investors sold their position when PR has been sold.
Speculations: - We do not know what is cooking about Goldboro. With the SP that low and the shareholders's sentiment right now, a hostile bid could well be in the work (the trading action would support that scenario) and allowing some new institutions to join might be a way to protect against a low ball offer.
- We did not see any insiders participating in the PP yet and this is suggesting that they are on black out. Management might be looking for a "big name" or a significant partner and you need to have a low entry point and some warrants to attract them. So extending the PP in order to allow them to cumulate a sizable position might be a "good" strategy.
- If you want a "negative" scenario, then they just think they do not have any near term catalysts or are not sure about markets' reaction when they will release updates so they get what they can now to ensure that the exploration west will provide some stunning numbers.
- Perhaps institutions that supported the company 2 or 3 years ago decided to get some of the cheap shares to average down. It's better to allow them to stay then having them to sell.
- Saint Barbara did some DD and decided to partner with us, getting a chunk of the shares.
On my side, my first pick would be for the "big name" scenario (like Eric Sprott or Pierre Lassonde for example) perfectly timed with a gold miners franzy. Remember during the last franzy : everybody wanted to have a share of the "next promising junior company". Management has been pretty quiet on the promo side lately and keeping the drill results to stunt the markets would be nice. I know I'm dreaming here however... :)