Four weeks of trading - a review.
Sungold has been trading for four weeks. Perhaps a retrospective is in order. At a time like this I wish Don were here to do a recap and put things in perspective. Now that he's a Director of the company I doubt that he'll be posting any more. We'll miss him here. His comments were so valuable because of his successful experience in the real estate development industry and his intimate knowledge of Sungold and the gaming development industry. He has already invested millions in Sungold, and has committed to investing another $35 million Cndn. On the bright side, Don will now have more hands-on involvement in the day to day management of the company.
Following are some of my fantasies about what he would say if he were able to comment openly now. Keep in mind that I haven't seen or heard from Don since his last comments on this thread (my apologies Don for taking the liberty)
1. Those brokers, analysts, journalists, exchange regulators, and critics on SI, who said that Sungold would not trade again have been defeated. They have been proven dead wrong. The motivations for their malicious attacks can now be seen for what they were: self-serving attempts to profit from short sales. They were eager to profit by destroying a business. They would have been happy to profit from the losses of legitimate shareholders. To say that these low-lifes were displeased that Sungold resumed trading would be an understatement. We can probably expect some more vicious bites before they finish squirming.
2. For investors, the gaming development business, much like real estate development, appears to involve a lot of hurrying up and waiting. Most of the work is done behind the scenes in sensitive complex negotiations with many levels of government, financiers, and gaming management companies. Investors who are accustomed to companies with tangible products and regular cash flows can easily become confused and demoralized by the pace of gaming development. This is a business which rewards those who can stay the course during what might be thought of as the pre-development phase. Profits are made between pre-development and the start of construction. Once revenue is confirmed, speculators will have already taken their profits. Yes, the pre-development phase involves many uncertainties. If anyone knows a way to make the sort of capital gains that are possible during this phase of gaming development, without taking risks, then they should do so.
3. Sungold management have proven their ability to persevere; and they have grown tougher and smarter through surviving adversity. For example, Sungold has spent almost four years, and a lot of money, assisting the Gun Lake Band to obtain federal recognition. They have obtained external consultation from Marquette, acknowledged experts in the gaming consultant industry. The company knows the potential revenue from a gaming development in the nexus of the highly populated Detroit, Windsor, Toledo, Ohio area. Sungold has proven that it has the disciplined determination to do whatever it takes to see this project through to completion. Gun Lake is the only new Indian Band in the area with the capacity for a casino. The company knows it has an effective monopoly and can afford to negotiate fiercely with financial and gaming management joint venture partners. The company has not come this far to give away the farm. Investors who understand gaming development will support the company in negotiating the best deal for shareholders even if this means the company does not always meet the timetable that shareholders might like.
3. As time passes, Sungold management becomes more experienced and knowledgeable. Management knows better how to employ external consultants, experienced directors, and solid joint venture partners. For example, the joint venture partners in South Korea supported the opposition gov't., and said it would become the new gov't. This, in fact has happened. The president, H. Banziger, has just returned from a trip to South Korea to be apprised of new developments there. The projects in SK are huge, and Sungold and their JV's are now in a position to negotiate lucrative arrangements with the new gov't. Similarly, in regard to Richmond Downs, all the major events which the company and its consultants predicted have come to pass: from gaining suport of the Horsemen's association, to the impending demise of Hastings Park, and gaining support from members of Richmond city council and the provincial cabinet.
4. From the begining, Sungold has carried out all its business without incurring debt. This means that when revenue begins flowing, it goes straight to the bottom line. This is partly why the market gives value to Sungold shares, and why impending revenue will directly effect the share price.
5. The nervous nellies have left. Expect the next area of resistance at $4. Although the total volume is about one million shares, with the churn effect of the market maker system, probably about 500,000 shares have traded hands. The vast majority of shares have now been transferred to people who understand the gaming development business and will hold through the market 'noise'. The shorts have not been buying in quantity. Since they remain rigidly fixated on the idea that the company will fail, they will not start buying in quantity until they are squeezed to death by their margins. Many new shareholders have been waiting before buying. They have wanted to be assured that the initial dip in share prices is over. They will buy with more confidence now that the price is gradually and certainly rising.
6. When the share price crosses $4 and the MM and Nasdaq are satisfied with the company and the trading patterns, the listing will move to the electronic system where it will be followed more widely and traded more easily.
7. Look how far we've come in a month. Congratulations to those who didn't let the bastards grind you down. This is the year when patience is being rewarded.
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