Don't miss a single story. Get it delivered to your inbox with our daily recap on what's moving the markets.

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.


Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.

Chris Parry

Chris Parry is a two-time Webster Award winning journalist who has been featured in the pages of The Vancouver Sun, The Province, National Post, Spin, Hollywood Reporter, FHM, Stuff, and Stockhouse. He was the first business journalist to identify and focus on the move to marijuana as an investment opportunity, and started Equity.Guru as a venue for honest, no punches pulled coverage of the North American public markets.

Leave a Reply

Be the First to Comment!

Notify of