Chavez's Recent Statement Positive For Crystallex
Posted on Jun 8th, 2007 with stocks: KRY
seekingalpha.com
Manny Otero submits: Given the recent quotes by Hugo Chavez, confirmed by multiple news sources and previous posts, there's little doubt in my mind that Crystallex (KRY) has reduced it's risk compared to Wednesday. For the President of Venezuela, a large and at the moment very active government, to mention KRY personally in his statements confirms the following:
1. KRY is being discussed at the highest level of government, meaning that decision makers are present and being considered. You do not go to any president's (or CEO's office for that matter) office with minor proposals or heavy discussion. You go there once the heavy discussion has been filtered out, and you're ready for the GO/NO-GO decision discussion. This is very positive for Chavez to have KRY in his mind, especially when the "mining industry" is mentioned. It's not that he was asked specifically about KRY, rather, he used them as THE EXAMPLE. This is extremely positive.
2. Chavez is not a fool, regardless of what you think about his policies. He's fully aware of the frustration that KRY has been suffering, and this statement was an effort to appease that management and show support. This demonstrates a healthy, working, functional relationship that both would like to maintain, otherwise why even mention it?
3. Chavez is also feeling tremendous internal pressure. Venezuela is currently suffering from very high unemployment. This statement was also aimed at appeasing the miners and locals of VZ. This is also in light of the nationalization of a critical broadcast TV station which has many upset.
4. Lastly, I would offer that it's very healthy that KRY has not issued a public statement supporting or commenting on the Chavez statement. First, they should be focused on the permit, not on managing wild expectations. Second, it's a demonstration of respect to Chavez to not undermine his statements in any way, but to simply allow the process to move forward. Chavez specifically noted that they are moving as quickly as possible. KRY wants to support him, and the best way to do this, is to say nothing and comply.
I think these statements are very positive, I think the lack of a major price movement (I'm realistic, and consider major anything between 5-10%, more I think would be too much) yesterday may be market manipulation.
I welcome other people's views and discussion, both longs and shorts, as we want to get all sides of this.
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