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A short time ago GMGC did a financing deal with convertible debs Whatever the timing attached to the deal, it has now started. Whoever is financing this deal has agreed to buy GMGC at 80% of the price it was at, this may be 8.40 etc, I am not sure of the number. However, the financier will start shorting the stock against his future guarantee lower price purchase, guaranteed by the managment, and will drive the price down to that level. If it falls further, so much the better for the financier as he can short and cover even more. When all the financing is over, he can buy back in a the new depressed price. Management has sold out the shareholders short term for the long term gain of "all." If you belileve in the company and can hold, fine, if you are on margin, watch out, especially as the price falls below 5, as this will force out the week hands, not weak in fortitude, but weak in $ to cover. This price drop has nothing to do with the earnings report or anything else. It has to do with the financing and was predictable. The question to ask yourself is why didn't you sell out at 13 or 12, and short the hell out of this stock with this financing coming down the pike, make a wad and then rebuy back in. By the way, these lessons are learned at great price if you are lucky, if you are stupid you just blame the shorts. But remember the shorts are institutional shorts, financiers, who are set up by the management to rainse funds. See the Motley Fool recent review of financing as it applies to GMGC for further info. Hopes this helps. |
