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Gold/Mining/Energy : Canmine resources -- Ignore unavailable to you. Want to Upgrade?

To: Ralph Kern who wrote (2690)	8/28/2000 9:03:59 PM
From: Marshhawk	Respond to of 2769

So, as we have been told the reason CMR trades at 65 cents is not that the market is accurately forecasting CMR's prospects, but rather that the market is 'brain-dead.' I have a theory. The price of CMR's security trades based on supply and demand. Supply is available from the current (approximate) 55 million shares AND ANY ADDITIONAL SHARES THE BOARD DECIDES TO ISSUE. Demand is a function of individuals buying your story that this is really a 1.60 stock. Now, assume for the moment that you have been 'commisioned' warrants. For example, you lent them 650k and you got 100,000 warrants, or that you extended the loan and got an undisclosed amount of warrants. Say the warrants are for 50c. As a disinterested, economically logical person, what do you do if the stock spikes to 1.40, or if it hangs at .70? Do you hang on and wait for the market to stop being braindead? Or do you sell, and take your money? That is, how do you, Ralph, expect the price to appreciate with this number of warrants floating around? Now, this may not be all bad, because as the 50 cent warrants are exercised, the corporation gets 50 cents. It does however tend to spike any upside movement. Of course, one could argue that the company has been faced with one of history's worst mineral resource markets, and that they needed capital, and that the warrants were necessary to obtain needed capital for the company to 1) survive and 2) grow and prosper. A countervailing argument could be made that if there were not an overhang of warrants and options in the market (many of which were issued to obtain and retain key personnel), there would be less supply, and thus the share price would be higher, warrants could be issued for .70 rather than .50 and the corporation could raise more money with less dilution. Now, if 'our board' had not issued various options and warrants perhaps we would have lost key personnel. Only the key personnel know how many offers they have had at other firms. My guess is not too many. Maybe I've missed it, but is somebody aware of 'talent' being pinched from promising junior mining firms; a la Wall Street and Silicon Valley? Dave Brown told us about a year ago that we would have twice the shares at 1/2 the price and no production in a year. Given that we trade at .65, that the corporation is losing money, that the board plans on doubling the float (or is asking for permission to double, and we know they have the votes), Mr. Market seems to be anticipating further significant supply of stock. I ask again, why does not our board tell current or potential key personnel to suck it up for a year until they are at least cash flow positive? And if the key personnel decide to leave because they don't get options and warrants this year, tell them not to let the door slam behind them on their way out.