HDY had its annual shareholders meeting today, and apparently participants were extremely “underwhelmed”. In fact, so underwhelmed that many of them chose to sell the stock today, creating a nasty down day on pretty high volume.
As they have done so many times in the past, I expected management to pull a rabbit out of the hat on the Guinea side. However, I have heard via third party (anotherwords, I talked to someone who talked to someone who was there) that the AGM was, in his words, pathetic.
As I have heard it, there were no encouraging words about the Guinea drilling permits, a very weak explanation concerning their lack of cash, questionable financing activities, and what appears to be a very weak result out of their Louisianna natural gas properties.
As if to add insult to injury, Q3 numbers were released today, and they of course showed a company with whopping ongoing losses. They appear to be burning about $1 million per quarter in cash, and as of the end of December were down to about 5 weeks of cash. That was 5 weeks ago.
Since I wasn’t there, I can’t confirm everything I am hearing. However, the stock’s behavior supports the version I heard.
This stock is now approaching the suggested $2.20 stop loss level. As I have been suggesting over the past two weeks – the management’s failure to come back from Guinea without the drilling permits would cause investors to lose patience.
If history repeats itself, the stock should now rebound as the faithful in HDY jump into the “bargain”. If you want out, the bounce would be the time to sell. Also, history tells us the company usually delivers an optimistic press release in these situations, which also helps improve the trading levels.
I intend to sell my remaining 10k shares if and when it bounces with an eye towards an opportunity to get back in. I can always get back in when it looks like they are really closing in on the drilling permits.
Comments and questions are welcome.
i read the stockholder meeting report and in a nut shell it was very disappointing, lacking any positve overtones. just mouthing words. it was a pathetic round of excuses / reasons for HDY’s inability to meet any of their expectations for projects in both Guinea and Louisana. regretfully i have now turned pestimistic instead of optimistic in my view of HDY. i will most probably wait for the next spike, if one should come, and sell my shares ASAP and move on.
Editor: Well stated. I am looking at it a little differently. I will probably sell, but I will be looking to get back in. I don’t believe this cat has used up all of its 9 lives yet.
Wish I had heeded your earlier observation that Gunea, if and when it happens, will take some time. Should have sold earlier.. Management is in my opnion very amateurish and pathetic ! As I had observed earlier, a small time inexperienced company trying to act big ! Kent Watt’ interview by AMEX was one of the most pitiful interviews I had ever seen by a CEO. That alone should have warned me away from this stock. Truly has it been said , greed gets you all the time ! Hope these so called “loyals” buy big..Will give us all a chance to sell and get out. -nopumpnowbash
Editor: Thank you for your contribution. Duly noted.
From what I am reading it is almost time to get back in. Investors have made their expectations too high. I think you are right, there may be another opportunity here.
Editor: Thank you for your contribution.
I took your advice and sold 2/3 of my position between 2.70 – 2.10. I did this for the fear of this crashing further and I could not afford to lose the money. During this uncertain time, I prefer to be on the sidelines. However, I do believe in HDY long-term if they can get the new PSA and permits. I don’t think they did work with PGS, TDI-Brooks and Infoterra to come up empty. Not to mention get Poling on the board. This could take time and I’m willing to wait. My question to you is: When should I get back in. It’s nerve wracking being on the sidelines knowing news could hit anytime. Thanks.
Editor: I believe the company will come out with some news release in the next week or so to put some excitement back into the stock. It will then surge, which I believe will be the next selling opportunity. From there, wherever it decides to drift down to over the next several weeks would be a good entry point. I can’t say where it will be yet. This is all just guesswork. You never know for sure when it’s going to happen. In the meantime, just getting the permits is only a baby step in the whole process. This company is basically broke, so they will need money, a partner, etc. If this is going to be a multi year play, there will be plenty of other opportunities.
What if any do you think is a good entry point for this stock, considering what you have digested from tha shm.
Editor: After the rebound, wherever it grinds down to will be the next good entry level. I don’t know exactly where it will be.
I first bought this thing on fundamentals @ .70 Now with all the hype and increased volume it has become a successful trade. Just follow the fear/greed patterns and forget about the dream weaving.
Editor: I’m not sure how anyone could buy this stock on fundamentals as there are none. The company is now generating about $100k per month in revs and sporting a $100 million market cap. They are going to need to deliver some really tangible developments this year, or this “story” will run out of legs, and the stock will trade at the $5 million market cap it deserves. Nevertheless- good trade from $.70- you must have been holding this one for quite some time.
When I read through their financial report I was taken aback at the amatuerish quality of the content. The results of the meeting therefore are really no surprise to me. Time to throw in the hand.
Editor: Agreed- this stock is living on potential. If they don’t start delivering on their potential pretty soon, this stock is doomed.
It seems to me that alot of investors played this one from the 50 ma. HDY bounced up right at the 50 ma. What are your thoughts on this? I had hoped it would go lower.
Editor: If you look at the pullbacks of the last 6 months, they have all been to the 50 dma. This time, it dropped down through the 50dma pretty severely before bouncing. I believe this stock can get a lot cheaper if they don’t deliver the drilling permits in Guinea soon. It will simply continue to slowly erode. If and when they deliver, the game will be back on. I have sold 3/4 of my positions, and am looking for some sort of hype news release to sell the remainder. Then, will be looking to buy back in cheap. On the other hand, they could get the permits and make me look silly. However, that is the way I am playing it.