Richard,
I don't mean to put a damper on ebullient spirits! But, as I wrote a short while back on this thread, the stock price is not going to be raised by any amount of rah-rah & come-on type of cheerleading! In the aftermath of the Bre-X nightmare, a lot of folks have, overnight, turned into "SHOW ME!" characters! And so, until Hawkeye clearly shows it has got what many believe is there at CEO, Mo and Tri-Reba, the stock is going to do nothing more than fluctuate within a narrow range.
I don't know whether Hawkeye will be showing the same symptoms I have seen among other junior golds..... that is, the stock price would dip instead of rise (contrary to general expectations) upon the release of good news! Why? Perhaps the following sequence of steps (borrowed from a post by Mike Sloan on the PFG thread) will shed some light!
1. insiders get stock dirt cheap
2. stock goes public
3. promoter(s) & (self-serving or unscrupulous types) hype stock
4. public (some savvy but mostly naive types) buy stock
5. good news (e.g., good drilling results, large purchases of stock by private placements or institutional buying) is released
6. public buys more stock in expectation of a price rise (accompanied by more cheerleading!) and insiders sell more stock (laughing all the way to the bank!)
7. stock price drops on good news (much to many buyers' shock, chagrin and embarrassment) because insiders are selling more than the public is buying!
And mind you, the playing field is tilted in favor of the insiders: they don't have to report their insider trading until about a month later and then it would take some more time before the insider trading report is released to the public. And yes, insiders and brokerage houses (IF they are *unscrupulous*!??!!?) can and do SHORT the stock for their own benefit. If the small investor is not alert, s/he may end up picking up mere crumbs off the table or what is even worse, is being left holding the bag!
Investors will do well to frequently contact and remind management and the IR staff and even the nobody somebodies that they should not entitle themselves to excessive awards of stocks, options etc until they have proven their worth to the shareholders! Let us now have some generous amount of rah-rah cheerleading on this for a change!
Richnorth |
