Stock liquidity...13 Aug 2008 08:46
During any one trading session it is quite difficult to get sensible quotes for packets of shares outside the normal 5000 market share, anything above 100k and you can find it very difficult to get a quote at over 150k. There are several ways liquidity can be improved, the first is that the major shareholders dump stock into the market, but that would be suicide if their investors got wind of it as most of the holdings were bacquired at much higher prices. The Directors could begin a sell off, as they would be able to arrange short term options arrangements at favourable terms. The Co could issue a secondary offering, persuading current and new investors to take up the offer on the promise of future share price enhancement. Either way, unless something is done to increase liquidity in the stock as we get nearer to the "scoping" study release date, scheduled for late Autumn, should it look positive, any significant buying of stock will cause the sp to spike and remain volatile.