RE: Markets and Funding15 Dec 2018 16:54
Aye up ATG :)
Yes, shorted of course but when you get an mcap of this size (currently £51m) with not much on the valued assets side of the equation then you're asking for it. Mcaps can and do get ahead of themselves as seen at MTR to a horrific extent after a classic P&D as seen here to 40s and now she's at mid teens.
The guys shorting tend to be smarter than your average bear and deep-pocketed and know what something is viably valued at, i.e. what its real value is in the shorter term ahead of value-increasing news arriving and that's how they make their money - typically after a manipulated pump to make PIs buy shares at a valuation that won't/can't be supported for some months/years down the line.
Reading the timing of these swings is of course what makes or breaks you in the stock market.
In the case of MTR/MOD, they've got an upcoming DFS at the end of Q1 that will put an incontrovertible valuation on the board there which is why the shorters (almost certainly the same guys who pumped it in the first place) have buried it ahead of that.
What IRR need, and conspicuously do not have, is a PEA/PFS for at least one of their giant lithium/gold assets and that's just asking to be hammered by the shorters (again, the same people who pumped it to 40s without doubt) as nobody can put a value on the company's assets therefore the mcap can not be supported/defended :)
I pointed out the glaring horizontal/TA support at 16s right now but I cannot of course know whether people feel like closing out around here if they know (and they ALWAYS know) when news is to arrive that could force them to do so.
I agree, it doesn't look good below here and my first assumption would be the 10-12p area but the longer this company rolls on without a PEA/PFS for the market to applying real value to it there's no knowing what the actual bottom will be.
It's a pity really because I know for sure that there's lots of people out there that like the size of what's going on here but I also know that much/most of that money will be sat on the sidelines until someone, somewhere puts a number down on paper to provide a floor valuation for the company.
As things stand, they're going to have to drop something like a $400m PEA/PFS NPV with a decent 30+ IRR to support the current mcap and I would assume they're nowhere near that, in time at least?
This really is one to keep an eye on though for the reason i've alluded to above - the potential size/value of these assets could be extraordinarily attractive the lower this goes from here.
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