Trading halts are the worst. even when the halt is on positive news, investors sit waiting to be able to get their money back, sometimes for days, sometimes for months, and when the light finally turns green to buy and/or sell again, there’s always a healthy swathe of folks who are just going to get out, no matter what.
Such was the case this morning with First Cobalt (FCC.V), which is doing all the right things – merging with Cobaltech (CSK.V) and Cobalt One, drilling, bringing in new blood, and apparently closing their deal – but still got shittered by the exit-chargers first thing as trading resumed.
Trading as high as $0.75 on the announcement of the three-way merger, back in late June, which will create a big Cobalt, Ontario regional player with a sizable land mass, the stock was naturally halted as that process played out. This morning it re-opened at $0.60, then quickly dropped to as little as $0.54.
Once the dust had settled and the bed-wetters had left the building, the traders returned and quickly brought the ship back to level with concerted buying.
Cobaltech followed its sister company’s pattern, dropping from $0.18 to $0.155.
Smart money sees these situations and sits back, waiting for the escapees to make it over the wall, then comes in for nice cheap stock. With FCC/CSK set to become part of a much bigger player, and cobalt still hot as a sector, these dips are very playable.
Their trading halt problem is your trading advantage.
Outside of the cobalt world, tech success story Lottogopher (LOTO.C) had its own hard drop, necessitated by the four month hold on its debut financing finally coming free trading.
With investors having come in at $0.25 and looking at their money having doubled in the time since, it was always likely that there’d be a drop off when those profits were claimed, a situation that LOTO management might not be too concerned about as it likely brought in a nice chunk of warrant cash at the same time.
LOTO sits at $0.33, down 19.5%. We continue to hold the stock, having come in at that early financing, and will look to increase our stake if it continues to wilt because we really like the play as a long term investment.
— Chris Parry
FULL DISCLOSURE: Cobaltech and First Cobalt are Equity.Guru marketing clients. Equity.Guru is an investor in Lottogopher.