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Gold/Mining/Energy : Crystallex (KRY) -- Ignore unavailable to you. Want to Upgrade?

To: Peter Neidhardt who wrote (6245)	3/5/1998 10:04:00 PM
From: Mr Metals	Read Replies (3) \| Respond to of 10836

Three days after hitting an alltime high of $11.85, Crystallex has nearly halved as it closed at $6.90 on Thursday on massive volumes. This cut nearly $300 million from KRY's market cap in 36 hours. Crystallex was down $2.35 to $6.90 on 2.8 million shares traded on the TSE and 2.8 million shares traded on the AMEX for a combined total of 5.6 million shares traded. This occured as the stock garnered massive attention from pro-traders, shorters, flippers, institutions, funds and brokers. The cause: Asensio. But why? A pause for thought: Recently a number of institutions and media people, even Placer Dome themselves, have stated that the reason that Placer's stock is underperforming is because everyone is waiting for the ruling from the Supreme Court of Venezuela on the Las Cristinas 4 & 6. If this is the case, why has Crystallex fallen nearly 50% in three days while Placer has also fallen almost $1 in the last three days to $17.50. If it is SO clear that Crystallex has no chance at getting the Las Cristinas, why aren't investors pouring money into Placer? The Answer: Because Asensio's comments border on being completely irrelevant. What we are currently witnessing is true warfare. If you are a Crystallex shareholder right now you are a casualty of war. We have spent the past 24 hours trying to figure out what Asensio is and why he chose Crystallex. The Answer: It gets complicated. We do know this, however: Asensio is a confessed short seller. As a matter of fact, our sources stated that in talks with him in the last year he has stated that ALL he does is short sell. That is fine. There is nothing wrong with short selling. However, is it possible that Asensio was caught offside to the tune of millions of dollars when KRY went from $2 to $11.85 and decided that the legal risk of being charged with fraud outweighed the financial risk? Anything is possible in this game! Who is Asensio? Manuel Asensio is an investment banker, undergraduate at Wharton, Harvard MBA with Latin American banking experience and M&A polishing at Bear, Stearns. He also has had his own legal problems and has been successfully sued for fraud in the past and had to pay retribution of more than $200,000. A quick recap: Asensio states that, "There does not exist any question concerning the title of ownership to Las Cristinas 4 & 6". Call Placer Dome and ask them. Even they admit that there is a 'question of title' although they are adamant they will win. In order to show how 'corrupt' Crystallex's management is, the only 'dirt' they could get was that a company that Marc Oppenheimer USED to be involved with was halted recently for 30 minutes after not paying a small fee. What??!! Even though Asensio's arguments seem pathetically inadequate, one thing is for certain: Asensio & Company have power. They have managed to cause a hysteria on KRY shaking millions of shares out of the market. No matter what has happened in the last few days to the price of the stock, there still remains one question and it is really the only question that matters to Crystallex in the long run: Is Crystallex awaiting a fourth ruling from the Supreme Court of Venezuela on its ownership of the Las Cristinas 4 & 6? In the short term, what will happen to the stock price? This is a variable that we are unsure of. Just how many people follow Asensio and short based on his recommendation? Will the 4th ruling come out and be in favor of Crystallex? Will any commentators come out in direct support of Crystallex or against it? The future in the next few days is certainly uncertain. However, on the bright side, it is a traders dream. Huge volatility and massive volumes create opportunities. It is our opinion that there is major support at the $5-$6 level and that it should hold at or near current levels on Friday barring any new events. For your interest, here is a letter which was sent to VHeadline/VENews from the portfolio manager of the NewCap Contrarian Fund: Dear Roy: We have been following the Asensio story regarding KRY closely. I have attempted to phone, fax and email Asensio with no success. Emails are returned undelivered. The phones ring busy. Last year after I appeared on CNBC in September, Manuel Asensio called to inquire regarding our knowlege of KRY. He at that time told me that he was short the stock. Therefore, his current releases saying that they just issued his recommendations are not accurate unless he lied to me in September. He also told me at that time that the stock was going to go down. He told me that he shorted that stock at $5.00. He said that sentiment in Venezuela was totally against KRY and pro PDG. This is not hearsay, this is what he told me directly. In his releases, he states that his firm is a bank. We are unable to locate any charter showing Asensio & Co. is registered anywhere as a bank. We have been able to determine that they are registered with the NASD. We have requested a copy of any complaints/diclosure information from the NASD. The NASD has disclosed to us that their is some disclosure information related to the company which they will be sending, but it will not arrive until likely Monday. To some of us that have done our homework, the fact that ownership of the property is with an entity controlled by the directors is not new information, though obviously, Asensio figures that it is important to publicize facts which have already been public information. The fact that Mael agreed not to publish the previous agreements it had with CVG, is also not new. You may copy this and use my name if you wish. Respectfully, Kenneth M. Holeski Portfolio Manager/NewCap Contrarian Fund