#MTR price being held back?

Metal Tiger have recently had some very positive RNS’s with news such as:

1. The Botswana T3 Scoping study.

2. Strategic update.

3. Confirmation of a cash offer and the signing of non disclosure agreements with parties interested in Botswana T3.

4. MOD brokers note.

 

We have had so much positive news recently the drop in the share price is difficult to understand.

We also have more news due such as Dowgate brokers note and MOD announcing that it expects to update the market with results of further drilling on the T3 dome soon.

So is the drop in the share price due to manipulation?

Two possible scenarios exist:

1. Potential buyer wants to keep share price low.

The lower the share price the more likely a lower offer is likely to be accepted. Could a potential buyer be driving the share price down before making an offer?

Would investors be tempted if say an offer of 6p a share came in today and would they have been interested when share price was 5.5p?

2. Stock being shorted.

Over the last three or four months unusual sells have been taking place. For example:

  • Somebody has been regularly selling 250k blocks, yet these haven’t triggered a TR1. Why would somebody want investors to know they are selling? If you didn’t want to spook the market you would try make your sells blend in with everybody else’s.
  • Regular sells on the opening bell. You wouldn’t do that if you wanted to maximise your returns.

 

What’s interesting is the MTR BOD have indicated they are aware of what could be happening as they have on several occasions warned those short that they are playing with fire.

Those short could face significant losses if one of the following happens:

1. Offer accepted for part of the business and shares suspended whilst due diligence carried out.

2. MTR having discussion with those with a short position, stringing them along with no intention of providing then with a lifeline to exit.

3. Funding provided for example by Saudi entity. This would close the door to a placing that those who are short might be banking participating in to close their positions.

4. Shorter wanting to close short position and starts buying shares rather than selling.

5. MTR start buying shares (court process instigated to enable this to happen).

6. Placing now, without letting the market makers, assuming they are short take part.

image

 

A substantial short position has potentially been built up over the last few months.

During this period many long term holders have taken the opportunity to increase their holding as it’s not if, but when will this start unraveling. 

Longterm investors are being patient as this is like a coiled spring that is getting ever tighter. As every day passes we get nearer  the recoil.

Hopefully Metal Tiger BOD, who have the backing of longterm holders have a surprise coming for those holding a short position.

 

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