Evidently, there is some disappointment about the lack of strong
price action.
I have addressed this in the past but like to add my two cents again.
The stock price rose to a $5-10 range based on anticipation that unconfirmed
extraordinary results may well be possible. That was a reach perhaps but
with the flow of encouraging data it was able to hold on to the range.
The non-certified results made the range a little more solid. Those already
holding stock were less inclined to part with it at these prices reducing
available sales volume. The certification of these results may well cause
the current range to be a bottom from which the stock will rise.
Unquestionably there will be sellers on the way up as investors have
individual targets they are aiming for (often based on cost of their
holdings) and not every one has the same intestinal fortitude to gut it
out.
However, why the stock did not jump $5 or more can be largely attributed
to the fact that the real believers, that is us, are already up to our
eyeballs in Naxos stock and probably were not a factor as buyers today.
I know I was't.
The real impetus will have to come from fresh buyers, new investors,
converted skeptics, and so on. That will take time as Henry rightfully
observed.
Also, for investors today there is a different dimension involved.
Investing or betting say $5000 on Naxos when it trades at $1 or $2 gives
quite a different feeling than buying 700 shares at $7. To exaggerate,
imagine you are asked to buy one share at $5000 or 5000 shares at $1.
Which one looks more attractive? The former may be the better investment
but the latter sure feels better.
Why? Because for a 100 % return on a stock you bought at $1 it only has to
go to $2 and that just doesnot seem to be a big deal. For the same return
today the stock will have to go to $14 and that is quite a move.
So aside from winning the skeptics over, they also have to overcome this
illusionary hurdle.
Perhaps Naxos should announce a 5-for-1 split, that will certainly draw in
a lot of small buyers, but then it would not be the right signal to the
market.
It will take time to see the appreciation we all expect, and I am sure along
the way up we will lose a few, but with the results certified by Ledoux
things look better than at any time before.
As this news will get around we should see more trading volume, but it looks
like it that the piecemeal dissemination of facts and data will probably
cause the stock to move slower than hoped for and that may not be so
bad. Once the pilot plant starts to replicate lab results we should see some
real progress.
JMHO
Jan |
