Calandra - Fool or Illegal Activity?
Here's what Thom Calandra said in his Calandra Report Yesterday (Mon Nov 10):
"Sometime in May, I asked you all to take the Ivanhoe Energy (IVAN) challenge, when the shares traded at 90 cents. Now that they sell for $6 or more, I say again: The stock, based on anticipated cash flow the next two
years from oil wells in China, California, Texas, and now Wyoming, is trading at about fair value. But what will propel this stock to $10 in short order, and then to $15 on Nasdaq, will be further developments in CEO Leon Daniel's efforts to improve production at southern Iraq oil fields."
1. IVAN Cash Flow is approx 2.4mm per quarter from two producing properties - 7ish wells in China and 30ish wells in a low margin/low producing field in California.
2. To attain cash flow in China, Texas, (currently they've drilled 3 (dry?) non-productive wells) California and Wyoming they need to:
~RAISE MONEY FOR EXPLORATION
~EXPLORE/DRILL HOLES, GET LUCKY, HIT OIL/GAS, FINISH WELLS
There is no guarantee any exploration they do will be a success. Wildcat exploration is VERY risky and rarely successful... The Wyoming property has a higher degree of likley success, but drilling wells to get 12-20bbl/day is risky, low margin business... Same with IVAN's producing Cali oil property... And neither Wyo or Ca have the potential to provide a cash flow that would justify a BILLION DOLLAR MARKET CAP...
So, how can Calandra say IVAN's BILLION DOLLAR MARKET CAP justifies it's current price?
Either he has no idea what "cash flow" means, and he just used a word he heard on CNBC to make himself sound smart, or he's making statements he knows are false to manipulate the price of IVAN higher....
Comments?
This post has been forwarded to CBS Marketwatch Legal Counsel Doug Appleton |
