The market is always looking for signals of various kinds. When
an exploration company announces that they have found something
other than what they were looking for, the market reacts negatively
because they believe the company is trying to create a new "story"
since they haven't managed to succeed in achieving their original
goal. Yet, accidental findings are fairly common. One company,
SUD, drilling for diamonds in Ont hit what looked like a strong
gold occurance. Stock went from 90 cents to 20.00.
This is high risk speculation, not blue chip investment. The price
rises and falls on the story. If the drill holes don't support
the story, the price crashes. Even a company like WSP, when it
announced that it was going to spend money exploring its property
in Africa, did not get a positive reaction. Speculators immediately
felt that it was an admission WSP had not found anything in the
NWT and were not trying to create a new story. Since then they've
focused on their NWT property and speculators have moved back
into the stock.
For MMU's mineral find to be treated in a positive light, the company
will have to come up with some mineral results that will look like
they have some real potential and not be more than a curiousity.
Keep in mind that there are now a lot of daytraders. Speculators
move in and out of stocks at a moment's notice. When the only
option was full service brokers, it was not feasible to buy and
sell on the difference of a penny or two.This makes it very hard
for junior companies which have to spend a lot of time proving up
a property. Speculators want instant results. Unless a company
hits a glory hole (NWI) it is very hard to create a quick run up.
And, even if the company does, if the follow up holes don't support
the glory hole, the price comes down very fast (NWI).
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