U.S. investment newsletter The Street Sweeper established a large short position in
Zenyatta Ventures Inc. (
TSX: V.ZEN,
Stock Forum) ahead of publishing a series of research reports on the company and said it stands to profit from any future declines in Zenyatta’s stock price.
Well known for its lengthy investigative articles, The StreetSweeper said it purchased shares in three other graphite sector companies, including
Alabama Graphite Corp. (
CNQ: AlP,
Stock Forum) ,
Big North Graphite Corp. (
TSX: V.NRT,
Stock Forum), and
Northern Graphite Corp. (
TSX: V.NGC,
Stock Forum).
The StreetSweeper said it therefore stands to profit from any future increases in the prices of those shares.
These developments have been duly noted by Zenyatta, which said the StreetSweeper report helped to ramp up trading activity on Monday, and resulted in a temporary drop in its stock price.
However, Zenyatta
has fired back in a press release in which it called the pieces "petty mud throwing" and accused writer Melissa Davis of "Using every FoxNews-esque trick in the book" in her piece titled "Zenyatta: A Story With More Holes Than Its Celebrated Mine?"
The company has vowed that the StreetSweeper’s short position will be blown out of the water should results come out in October as positively as the company intends.
Zenyatta shares rose 0.54% to $3.72 on Friday, leaving the company with a market cap of $204.8 million, based on 55 million shares outstanding. The stock traded up to $5 in late July after a steady rise from 34.5 cents in October 2012.
Zenyatta has been drilling a graphite discovery on its Albany property in northern Ontario.