well if the report is in<like i have heard>..and its gone to the exchanges.. let's break
out in a chorus of TOMORRROW..TOMORROW..i LOVE ya..TOMORROW..
Please read the following ROn Struthers UPDATE from this morning!
RON STRUTHERS UPDATE AS OF NOV 12,1997
I have been a little more silent on IPM for a while. I did not want to
give the shorts too much info. It does not matter if you email this or
forward to other IPM shareholders. It is too late for the shorts to do
anything now
THE SHORT SQUEEZE
My last update the other day on IPM was about the short players against
the stock. A short squeeze can cause an explosive rally in a stock price,
however these instances are rare. Certain conditions have to be met in order
for this to happen and with IPM I believe they have.
I follow this stock close and know most of the shareholders big and
small. My research tells me there are about 4 million shares floating around
that could trade in the near term. These are shares not held by
Institutions, IPM management, Insiders and those close to the company. It
could be a little less or more with some recent Institutional buying but I
will stick with the 4M. Some may say this is small but they don't realize
the amount in European funds and large shareholders that are close to the
company and long term holders.
There is approx 800,000 shares short. This could be a little higher but
800,000 is a huge position with a 4 million float. This is about 4 days of
trading in the stock.
This ratio is a very explosive situation for a huge rally on a short
squeeze. Even so, stocks with these ratios seldom experience a short
squeeze. They drop in price and the shorts cover or buy back at a lower
price and make their profit. Quite often the main reason for this is the
shorts are organized while the longs or buyers are not.
The shorts will work together, they will sell when volume is low to drive
down prices. Sell at the end of the day to force a lower close on the stock
which can paint a poor technical picture. They will use to their advantage
weak market conditions or events that will cause investors to be nervous. As
you seen from my last email some corrupt shorters will use the press
and the internet to cast doubt on their short target to cause investor panic
and selling of the stock so they can buy at lower prices and profit. Simply
put the shorts are well organized and effective.
If you read the Silicon Investor thread you can expect a big pick up on
activity by the shorts who will try to cast doubt on the news release. Some
of these posters will have several different IDs or names and will be
talking to themselves trying to cast doubt.
The longs or buyers are seldom organized. Everyone is buying or selling
at random and quite often influenced by the shorts game. However this is not
always the case. Sometimes an event occurs, a news item or some fundamental
development that greatly improves the future outlook of the stock. This
change likely warrants a much higher share price and a lot of buying comes
into the stock. The longs or buyers are now together or organized, unknow to
each other but the news or fundamental development has cause them to act
together. This buying pressure and high volume overwhelms the short players
and they simply step aside momentarily.
The other thing that can unite buyers and squeeze the shorts are the
Institutions. They have deep pockets and a lot of buying power. There are
about a dozen Institutional investors in IPM stock and others on the
sidelines, waiting confirmation from BD/Bateman that there is economical
amounts of gold and platinum at BRX. Many of these Institutions have done
considerable due diligence to take initial positions and plan on adding to
their positions on positive BD/Bateman news. Others that have not bought
will take positions once the BD/Bateman audit is out because this removes
considerable risk from the stock and greatly enhances the reward.
All this buying power drives up the share price and as I mentioned before
forces the shorts to buy back the stock to cut their losses. The shorts
will not keep on putting in $millions to maintain their short positions,
they will have to cover or buy back. This is just more buying that throws
gasoline on the fire and forces the stock even higher.
With the high ratio of shorts to the float, the significant news in the
wings and the large Institutional ownership this is an explosive situation.
Do not be surprised to see the stock jump $5 or more a day.
I cannot be certain on the markets reaction to the news until I see it,
so therefore I will send out an update once the news is released.
I have been accurate on a number of buying levels on this stock before.
This does not mean I will be right this time but I feel the odds are very
high of this short squeeze happening.
In this case you do not want to sell your stock into this rally. You will
forego big profit potential and besides any sales will only help the shorts
cover. Instead, assuming positive news of course it might pay to add to
positions. This could be difficult if the stock is moving quickly and goes
by your bid but if you do buy more and/or are looking for profits, I would
watch about 4 to 5 days after the news for a big price rise on good volume
or whenever the shares are significantly above the old high of $14. This
will be the shorts covering and would not hurt, to then sell them some
shares at $20 or so.
This we will not mind
The shorts have made a number of fatal errors that will cost them big
time
1- They have counted on BD/Bateman to prove IPM a scam. They are wrong.
This is their biggest mistake
2- They have misjudged the strong and loyal support for the company. This
has caused the stock not to reach the low levels they hoped to cover at
3- They appear too emotional in their attach and seem more hung up on
being right. This has skewed their judgement and they have missed to
cover around $4 a few times for a decent profit
4- They have misjudged the Institutional support and have gotten beaten
back anytime an Institution entered the market. This will kill them when
more than one steps up to the plate.
5 - They have miscalculated the tightness of the float at around 4
million. This does not give them enough shares to cover into
6 - They may have anticipated a private placement or dilution in the stock
to help them cover lower. They are wrong. I can't divulge yet how this
will work but IPM will get financed and there won't be the shares or
dilution come to the market as they expected to help cover.
For part of the equation, I can say that Dale Runyon who holds shares in
IPM until BRX is paid for is in no hurry and wants to see IPM succeed. I
doubt that very few or any of these shares will ever hit the market.
7 - They have ignored the support or buyers that will come out of London
and Australia
8 - I talk to many Institutions and Fund managers. Actually my
subscription list contains a good number of brokers, Investment
Bankers, Institutions and Fund Managers. Many Funds/Institutions have
different rules or policies, such as not investing in companies with a
market capitalization of less than $250 million. The shorts do not know
that one or more of these is waiting on the sidelines to have
shorty for lunch if he is still on the platter
8 - Their final mistake will be to wait too long in this rally to cover.
This is why you should be patient. The big move and the huge daily
jumps in the stock will be when it moves over $10. This is when they
will have to cover as their losses will become too large to contain
A very good signal to watch for is the first day the stock closes down
after several big up days. This quite often signals a temporary top or a
trading opportunity. It has taken longer than I thought for the developments
in IPM to occur. We have waited this long. I believe it would pay to wait
several days after the news release and get the higher reward that is
deserving of our patience.
I believe this will only be the first move in the stock and just a warm-up
of what is to come. After the BD/Bateman confirmation a new IPM will be
born. There will no longer be long waits for news. In fact there will be a
barage of news releases over the next six months.
Drill results/assays from the large backlog of samples. These will come
out in multiple releases, new drill programs, reserve and resource
calculations.
Feasibility studies, cost estimates and mine design, financing, additional
management and mining people. All this in co-operation with 3rd party
consultants Bateman, BD and Lycopodium. I expect Bateman to be the major
player, perhaps through a JV as an equity partner or mine operator
It is probably not much good to call the company now as I expect they
will be silent until the news is released. I expect this will be Thursday or
Friday after the close. I like the idea of Thursday, a good day of trading
Friday and then the weekend for the Institutions to digest the news release.
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