As if January 23, 2012, JPMorgan now has a 5% passive stake in Keegan Resources.
Is this short covering at a very low price (sub $4) as it was once a $9 plus stock. Or is this stake to be used as manipulation of Keegan shares? The 5% amounts to approximately $14 million.
My take. . . I don't think JPMorgan makes investments to lose money.
I think they know something.
Very interesting! I'll have to look more into this. Maybe worth looking into what other mines JP Morgan has their fingers on.
Not 100% sure if you are implying that they get involved in Keegan because they know that production will increase dramatically and they want a piece of the action. Or they know that other parties might be interested and while they might profit from shorting, they will also profit from what could be an incredible abundance of resources which they would like some control of.
And as we know shorting while having a short term impact, cannot hold down real value in the long run. The basic fundamental principle of TA.
I'll try to add my 2c - Owned the stock for years, have a decent sized position in it.
1) They have a market cap of appx. $300 million, with $200 mil in the bank.....you're getting their 5 mil+ ounce resource for $100mil!
2) Ghana is a fantastic, stable mining jurisdiction
3) Ross Beatty of Pan American silver fame bought in at $5 late last year. Thinks it is a "sure takeout candidate. Could be 3 months or 3 years. My bet is on the former. Could be worth $9+"
4) It is ran by a very competent group of people. BOD is solid. Rick Rule has been in this for a while too.
5) Personally, I think the big money behind the large cap miners are actively shorting the junior take over candidates, in anticipation of buying them out on the cheap. Would not surprise me if JPM was involved in the recent takedown. Nor does it surprise me that they are long and strong at these levels.
6) I'd be shocked to see the BOD let it go for less than $9. However, at current prices that would mean a 100% + premium. Any buyer would face a huge shareholder backlash for paying that sort of premium. Which means this thing should fairly quickly go to $6......so long as the wind is at the mining shares backs
Picked up some more at $3.77 - wish I had bough much more. As close to a lock as it gets.
I own it. That $200M cash gives them the luxury of sitting tight and waiting for the right offer to come along. They can't be pushed into something disadvantageous. Be Right, Sit Tight.