Recent NFG Price action.
So underwater like the rest of us longs here. Been thinking (nervously) of what it could mean and the probabilities. Of course as many have stated - as far as we know - nothing has changed (other than share price). In fact, if anything, fundamentals have improved (new high grade zones, gold at depth, MRE and PEA on the way).
Possibility #1: Something has been discovered (maybe in the deep drilling) that indicates a mine is unfeasible or uneconomical and key investors are fleeing like rats on a sinking ship.
Probability: Very Low
This of course would be the worse case scenario. On a BreX level. The sell off would be so highly illegal, can't see being worth it with the lawsuits to follow.
Possibility #2: NFG continues to flood the market with sares to raise capital and the big fish are taking advantage by buying it down on the cheap.
Probability: High.
Management has done this since it's all time peak. For whatever reason they do not seem to mind printing shares to keep the coffers full. Seems no price is too low - just double or triple the amount of shares to get the cash. Maybe their positions are so large the dilution is minimal to them (but devastation to us small timers).
Possibility 3#: Short term manipulators are having their way with this stock.
Probability: Very High
Long term investors are locked in and holding. Very small float available make it easy to manipulate. Management can really do nothing about it and just staying focused on their plan. In the end it won't matter too much. As long as they deliver and don't dilute endlessly, a year from now (if we can hold out) the stock goes to $10 or $20 - won't really matter what happens in the short term.
Possibility #4: Normal price action on high risk stock soon to need more capital.
Probability: Sadly, High
Didn't we see this in the months leading up to the last time the raised significant capital?
Outside the box:
Probability: impossible to know
The age old question is always - who benefits the most from the low price?
Could MAE stakeholders be driving it down to double their ownership percentage if NFG buys them out? Could a deep pocket investor or a large bank be trying to shake out shares on the cheap?
The good news is over the long term, most of those scenarios will still work out for the long investor. Might just take a lot longer than we hoped.Good luck catching the falling knife!