Friday was a huge day for HDY shareholders. I’m sure there are plenty of you who want to stick it to me for currently being on the sidelines. Feel free- as I have previously written, I knew I could end up with egg on my face as the stock traded up. One facial omelet- coming up.
I case you are wondering, there is an unconfirmed rumor that one of more of the senior management at HDY is back in Guinea. I don’t know if this is the magic trip, if it fact it is happening, but the market sure liked the possibility to the tune of 1.2 million shares and a nearly 30% move on Friday.
I believe this stock is becoming a traders darling. After all, how many stocks make 30% moves in one day with a fair amount of regularity.
So, what to do now. I would imagine the stock will go up on Monday, and possibly for a couple more days before giving back some ground.
Unless of course the company announces it has the drilling permits. Then it will continue climbing the charts, and the egg will spread far beyond my face.
So, here’s a chart, but it’s probably premature to even look:
If the stock starts coming back a little, you might look at $2.55 as a first level to pick some up, then really load up if you see $2.36.
If it doesn’t gap open on Monday morning, I might just pick up a 25% position as insurance against being out of a really big move.
Comments are welcome. Go ahead- lay into me- I can take. I was wrong, and have been wrong plenty of times in the past.
You should do a little bit better proof reading. I would chalk it up to excitement.
Editor: I tend to write these things at odd ball times fairly quickly. Will take it under advisement.
Don’t be too hard on yourself regarding HDY. The stock was initially trading on 3/10 down at the $2.10 level. Without a crystal ball, no one could have anticipated such a dramatic 28% one day surge, especially in consideration of HDY’s steady downhill performance, recent disappointing shareholders meeting and continued lack to obtain the offshore drilling permits in Guinea. After reading HDY’s announcement last week about the newly created USA-based organization “American Friends of Guinea” (AFG) for Medical and Infrastructure Aide, with CEO Kent Watts acting / being used as the group’s front man, my first thoughts were that HDY was now caught in a worsen business relationship akin to “you scratch my back then I’ll scratch your back, maybe”. Most definitely not a sound starting point to achieve a mutually healthy and prosperous business relationship in the future. I think HDY success in Guinea is solely at the whim of the Guinea Gov’t. The Guinea directors, naturally, are calling the shots and HDY is jumping through hoops hoping to be rewarded with a bone, a bone which may or may not ever materialize. I could be wrong but HDY has not impressed me at all lately. From a bystander perspective, I will continue to monitor HDY and see what develops. Thank you. WF
Editor: Thanks for the comment. My sentiments as well. The formation of the foundation sounds like someone who is coming from a position of weakness. However, it is exciting the way this one trades.
It is obvious that the market is extremely sensitive to any kind of development concerning HDY. This is reflected in the extreme fluctuations in share price and volume, and as you have stated, this stock has indeed become a trader’s dream. However, let’s not forget the tremendous upside potential of this investment. In the long run, if all goes according to plan, we’re looking at a market cap in the billion dollar range. With that in mind, my strategy for this stock is to simply hold a 50% long-term position and trade the remaining 50% on hype and news. So far it’s been working out great.
Editor: Not that I’m a glass half empty guy, but against that long term potential is the current $100 million market cap vs virutally no sales. Offers some fairly significant downside risk. Nevertheless, I believe you have an excellent trading strategy for this one. I would have been well served to follow your lead.
Maybe this is the rally you should have sold into. It looks like a sell off is happening the day after this rally. If these prices can’t be sustained then it isn’t much of a rally.
Editor: I woke up this AM prepared to buy some if it opened flat on the premise it would go higher. The way it behaved, I decided to hold off. As you said- not much of a rally.
Is there still an unconfirmed rumor? Or, can we confirm there is no rumor?
Editor: Unless the company makes a public disclosure, it is always an unconfirmed rumor. You can look at the company’s public disclosure through the press releases and 8ks as easily as I can.
You back in? Do you think mgmt is in Guinea?
Editor: No, and I don’t know for sure. I only know what the rumor is. I should have picked up a few shares on the perfect 31.8% retracement, but still on the sidelines for now.
1)…I definitely think that all who have such a low opinion of HDY should stay on the sidelines for AT LEAST another two weeks…perhaps a month. Maybe…just maybe…that will improve your opinion. Ie, you should just start from scratch with this very “unimpressive” company. 2)…you talk about coming from a position of weakness…sheesh!!!…as if you didn’t know they’re not Exxon?? But they are and have been coming from a different position of strength…and that is the strength of their geophysics and geophysical team…w/o a doubt one of the best in the world. But I agree with all those negative on the company. You should definitely be bystanders for another month or so…nothing for you to get excited about. Will come and get you if we find out for sure we’ve got a winner. It might take us a few weeks or months or so. We wouldn’t want to come back to you just with unimportant news of for instance drilling permits. After all….we all know all the things that can fall thru with those, esp when one is dealing with a disappointing, weak, little ole company with a kiss-ass CEO like Watts. So we won’t bother you until they hit oil. Good??!! jt
Editor: Good luck with it.
HDY- it appears the game may be back on. What is your take on the recent PR stating the Watts crew is back in Guinea filming the proceedings? My hunch says they have been in Guinea for two weeks and the deal is sealed. I hope you consider buying back in on Monday as news could come any day.
Editor: Probably not a bad idea. I still don’t own any, but I should always keep a little in case they pull it off sooner than later.
P.S>. most rumors are turning out to be true on this company.
Editor: There was a rumor that the company was going to get the drilling permits in January, but that did not pan out. In this case, quite right.
Alright, alright it seems sooo easy… get a few guys together (guys who know guys who have heard of other guys who have friends) get a concept (make a easy few bucks drilling some abandoned wells in the gulf since nobody wants them and explore the world), sell some stock and there you go…rich. Well I like the story of the not entirely experienced (or “detailed clueless”) entrepreneur/geologist mixed up in international relations/ diplomacy with limited means who just happens to have enough “moxie” (I will refrain from using anything of the vernacular) to stand up a foreign government (or its agents) in an int’l court and win. The story gets better with the ouster of the original company and negotiations with a foreigh government just to keep their stake in what they found just because they looked outside the box. That is a story, in my opinion, that is worth a little investment!
Editor: You seem to have the story fairly well down with one exception. HDY does have a substantial amount of seismic data, core samples, and drilling sites identified in the concession. That gives them a leg up in the process. Forget Louisianna- it is not generating the numbers people were expecting. Another failed deal on their part. You have it right however- definately worth a punt.
3/21/06-PRESS RELEASE— WATTS NEWS ? UNFORTUNELY–SAME OLD PRESS RELEASE !! ITS LIKE READING A BOOK 3 TIMES. APPEARS LIKE MR. WATTS IS TRYING TO KEEP THE INTEREST OF THE STOCK HOLDERS ON THE HIGH ROAD. WHATS YOU OPINION-MR.EDITOR ?
Editor: I gave my opinion in yesterday’s new BLOG.