Ron:
I have been following this stock looking for a place to enter a short. I didn't see the PR till today when stock was already at 29, called my broker and they had no shares to lend for shorting --so lost out. But, for the benefit of you longs--that IR guy Dan Palikrouris is probably history. Two huge mistakes in that PR probably unnecessarily caused today's debacle. First, it implies the stock is only worth $5 per share, although I'm sure that wasn't what was meant by "committed to spend $15M...and issuing 3 million treasury shares". Sounds like they have to issue 3 million shares to get the $15M to spend. Secondly, not all Reg S financing is a kiss of death--only the convertible debentures which are convertible into common shares at a discount to the share price when converted--a potential unlimited dilution. See what happened to PNCL and TTRIF and maybe to SOLV when they used Reg S Conv Debs. This PR sounds like it is the simple issuance of stock the company already has on hand, not conv debs and not an unknown dilution. Unfortunately or not, Reg S has had such horrible bad press in Forbes, Barrons etc as a scam to rip-off investors, so that they dump any company desperate enough to have to resort to any kind of Reg S financing. All DELGF would have had to do was to make clear there would be no huge dilution--that no conv debs were involved. Maybe they will issue a clarifying PR (assuming they have enough sense to realize what hit them)and the stock will turn around--it hit 14.75 today and bounced off this major support. After all, the fundamentals haven't changed, have they? You have to realize with the parabolic rise in this stock, shorts were hovering over it just waiting for any sign of weakness or slow down in the rate of rise and then jump on it with sell orders. Realize too that for every short seller there is a buyer---I saw upticks all day long as buyers entered--so maybe this dumb PR was an intentional mistake done to drive the price down temporarily??
Tomorrow is more important than today was.
Regards,
Gary
PS. Yes, I'm getting a new broker--I figure this one cost me $10K today as I probably would have covered at 19-20. |
