Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony, -- Ignore unavailable to you. Want to Upgrade?

To: RockyBalboa who wrote (46214)	11/5/1999 7:31:00 AM
From: tonto	Respond to of 122087

CHAR: Thursday November 4, 8:52 pm Eastern Time FOCUS-Chaparral stock slips as trading resumes (Adds details, background, analyst quotes) By Andrew Kelly HOUSTON, Nov 4 (Reuters) - Shares of Chaparral Resources Inc. (NasdaqSC:CHAR - news) dropped on Thursday, giving back some of its recent sharp gains, as trading in the small oil company resumed on the Nasdaq after being halted late on Tuesday. Halted at $25 on Tuesday, Houston-based Chaparral's stock opened at just over $13 Thursday but later recovered to $17-1/4 -- roughly half of Tuesday's intraday high of $35, but still more than double its value at the close of trading on Monday. Shares of Chaparral -- whose shareholders include Microsoft Corp. (NasdaqNM:MSFT - news) co-founder Bill Gates -- more than tripled on Tuesday after the small, financially troubled company said it signed a breakthrough $24 million loan deal with Shell Capital Services Ltd. (quote from Yahoo! UK & Ireland: SHEL.L), a unit of Royal Dutch/Shell Group (quote from Yahoo! UK & Ireland: SHEL.L). Nasdaq halted trading in Chaparral on Tuesday afternoon at $25 pending clarification from the company of the loan agreement and an explanation of the surge in its stock, which had closed on Monday at slightly less than $7. Trading in the stock remained suspended all day Wednesday. Chaparral released a new statement after the market closed on Wednesday, saying it knew of no reasons for the jump in its share price other than the loan agreement. The statement also spelled out key conditions of the loan agreement that still have to be satisfied and approved by shareholders, including potentially dilutive plans to issue several million new shares of common stock. Mike Schrampf, an oil analyst with brokerage A.G. Edwards, suggested that Internet-based stock traders, attracted by Bill Gates' association with Chaparral, might have bid up the stock price on Tuesday after learning of the loan agreement. ``I guess the Internet got a hold of it all and the traders rode the price up, but I just can't see how $24 million can be such a huge turnaround for a company,' he said. Some shareholders who had been looking for an exit, but not at previous low prices, might have seized on the jump in the share price as a selling opportunity, with some spillover of that effect continuing on Thursday, he added. The company has persistently lost money for the last four years, and until this week its stock price has slid steadily from a high of $180 in 1997. In a gloomy second-quarter financial statement filed in August, management warned investors that Chaparral's perilous financial position raised ``substantial doubt about the company's ability to continue as a going concern.' Chaparral, which had long been seeking to secure financing, said the loan agreement would enable it to develop the Karakuduk oil field in the Central Asian nation of Kazakhstan, as long as certain key conditions of the deal were fulfilled. Chaparral's only asset is a 50 percent stake in Karakuduk-Munay Inc. (KKM) which holds a license to develop the 17,000-acre Karakuduk oil field. According to public records, Bill Gates' personal investment vehicle, Cascade Investment, declared a 5.7 percent stake in Chaparral Resources in February of this year. The records also indicate that in September Gates' firm filed notices of intent to sell 26,555 shares, or slightly less than half of the 55,555 shares he had previously held. In Wednesday's statement, Chaparral also set out in greater detail the conditions of the loan agreement, warning investors it could not guarantee that the conditions would be met and the $24 million loan disbursed to the company. Chaparral said that as part of the agreement it planned to raise $9 million via a rights offering of its common stock at $1.86 a share, which could result in the issuance of some 4.8 million new shares of common stock to existing holders. Conversion of debt and the granting of a warrant to Shell will result in issuance of 5.3 million new shares of common stock, while provisions of the company's preferred stock could result in issuance of 225,000 new shares of common stock. Chaparral, which has some 978,000 shares of common stock outstanding, declined to quantify the final number of shares that would be outstanding if everything went as planned. -------------------------------------------------------------------------------- More Quotes and News: Chaparral Resources Inc (NasdaqSC:CHAR - news) Microsoft Corp (NasdaqNM:MSFT - news)