Mudbilly, you seem to know the game very well. I commend your reasons to be short, however you are gravely mistaken on some points.
1. To raise capital one concern: The sentinent group owned about 18% of AUMN pre merger they have announced that they want to keep that holding % that would in todays market price mean an additional 80 million in cash. Sprott Asset Management (inside info) have already contacted the co for a massive PP that is intended not only to secure funding but to push the share price up.
Secondly how would you respond if AUMN got a strategic partner? Like Silver wheaton, (AEM + RBY etc) There are a lot of "mature" miners with not so interesting projects who would love to get a piece of the El Quevat project which keeps expanding and getting more attractive every month.
Btw the resources are vastly UNDERVALUED if anything. There is a strike lenght of at least 2,5-3 km and some areas have holes of 20 meters over 1800 gram/t OPEN IN ALL DIRECTIONS. There is no doubt in any of the covering analysts minds that El Quevar is a world class project with +120 million ounces of high grade silver.
Nevertheless they need to get their act together and secure financing to scare of shorts and get the share price moving. Which I am convinced they will soon enough.
The risk is being short, Obviously the shorts have manipulated the share price for some 2 months, but especially the last 2 weeks.
1. congratulations on the profits, that was a nice run up........
2 . there is no such thing as their (free) money..........at this point in time, it is YOUR money ....the question to ask is.........if it were under your pillow, would you buy aumn with it tomorrow ?
3. no, i won't name other short plays i'm in....but thanks for asking
You have some great reasons to go short. I like it. I mean, I like it when people know what they are doing, and why. I don't. I just keep these shares, but I can't tell you really why. They told me that this is former bankrupt APEX, so I bought it for my accounts. I guess, I was just lucky, because I am not a sophisticated investor. I just make bets, like on horses. That's why I come here sometimes, to see what investors are thinking and doing. So I bought some AUMN shares for $7-12, sold 1/3 for $26, and now -- I am thinking, what should I do with my free shares? I don't know...
BTW, can you tell me what other companies you are shorting? Thank you.
You do make some good points, although you're a complete cynic. It doesn't make much sense that ECU couldn't get financing with $40 silver prices(especially since AUMN managagment says that $10 million is all they plan on spending on Valerdena this year). Unless of course ECU management believes the Golden Mineral's silver resource potential is on par with Valerdena(merger of equals). They did clearly say in the merger presentation that it was a merger of equals.
To say that they couldn't get a debt deal done is just your cynical opinion, just like your comment about the price of silver having no importance. A debt deal or a very low interest convertible preferred offering makes the most sense. Hopefully the convertible price will be much higher than current levels.
As for the technicals, as of now I'm not bearish unless the stock closes below $10.93. The lastest drift down is a retest of the lows from mid August unless proven otherwise.
Time will tell, but I think it's much more risky to be short than long.
I am short this stock because I do believe:.
A) The resource estimates a vastly overstated.
They have been milking the potential of that site since at least 2005, i don't need to look any further back that ...
March 18, 2005
Quebec-based ECU Silver Mining (TSX-V: ECU) has completed phase two of its expansion program at the Velardeña mill site in Mexico's Durango state, the company announced.
At start-up, the capacity of the mill will be approximately 250t/d, which is a 40% increase over the current feed rate of approximately 180t/d. The company plans to increase the feed rate on a weekly basis for an anticipated two to three month period, allowing for the mill being optimized to a maximum capacity of 320-350t/d.
The company is now waiting for final approval of recent additions to the mill from state power company (CFE), which it expects to receive soon.
"A verbal approval was received today (Friday, March 18), and the written approval is expected very shortly," the company said in a statement.
ECU will now focus on phase three of its expansion program, which will include the purchase of another mill. This expansion program is designed to significantly enhance the recovery process and to reduce smelter penalties, therefore maximizing operating results.
B) They won't be able to raise additional capital
the only way i foresee them in raising money is dulition of the stock, NOBODY is going to loan them money on there "assets" or to extract those assets, or else they would have lent that money to ECU
C) The price of silver will collapse below $20/oz.
the price of silver has no bearing on the this company, they sell stock not silver....
D) company leadership
this company was raised out of the ashes of a bankrupt company, i see no fundamentals that would make this version of the company any more viable than the old version...
E) technicals of the stock
the stock is rolling over and there is nothing under it once it once breaks support at 11ish
so please tell me, why would anybody be long this stock ?
the footnote that is in each of those filings.
"Shares sold to satisfy tax liabilities in connection with the vesting of ___ shares of restricted common stock on September 2, 2011."
so the shares that are being sold are sold to meet the tax liability of a larger portion of restricted shares that were becoming fully vested.
so all these recent filings are insider selling small portions of much larger stakes that they COULD have sold. and the big reason behind their selling is that they have to pay taxes on these shares now that they are fully vested.
but by all means, let's call it insider dumping and say that insiders don't have any faith in the stock.