Resource companies are notoriously bad at meeting deadlines. When a delay is announced it is often a signal to ditch the stock. Judging by the response to Bowleven’s (BLVN) announcement this morning it seems the market is behaving true to form. Bowleven is down 1.25p to 33.75p, last seen. However, having spoken with the company’s PR representative, this drop could be a buying opportunity. But then again, I’ve been saying that since 38.25p!
When a stock persistently refuses to respond positively to good news this can suggest something is wrong behind the scenes. It is true that as the resource market on AIM continues its slow recovery there have been examples of delayed reactions. In some instances, a wary investing public has taken its time to accept and digest upbeat reports, before eventually pushing deserving share prices higher. However, in the case of Bowleven (BLVN), it’s been nearly six weeks since the company announced its Etinde farm-out with LUKOIL and NewAge and the stock continues to trade below the notional value of the deal. The Etinde farm-out is still to complete, but since it was first announced Bowleven has taken steps to resolve the outstanding issues, including today’s announcement that the long awaited Exploitation Authorisation has been formally awarded. So is the market telling CEO Kevin Hart that his end should be nigh?
Paid for researcher Edison has initiated its coverage of Bowleven (i.e. accepted a cheque to write a detailed 12 page report) with a claim that the shares, now 39p, are worth 108p.
So my dastardly plan worked! About a month ago, when Bowleven (BLVN) announced its proposed Etinde farm-out, I penned a piece suggesting the stock had run into headwinds at 45p and it looked a good spot to take profits. Knowing how much influence I hold over markets, I instructed my cabal of skulking shorters to sell Bowleven’s stock aggressively, as this was a guaranteed opportunity to make a quick killing. Our goal always was to make a heap of money, as we beat up poor old Bowleven’s stock to such an extent that our corrupt little group of pals would gain a much better entry price to go long. We are so amazing at what we do, we profit all the way up and all the way down. Now, I’m back to ramp this stock to high heaven with one article, which is bound to send the share price to 100p. While I continue to pull the strings of Bowleven’s share price at will, I only have one question running through the back of my mind – do some of you really have no idea how ridiculous your comments sound?!
If you’ve ever played poker you will know the worst thing that can happen to a bad player, who doesn’t understand the mechanics or maths of the game, is to win a reasonably large amount early in his or her playing days. Invariably such people convince themselves they have unlocked the secrets of the game and are invincible, rather than recognise the luck of the draw. Our lucky winner invariably ends up giving back his or her winnings to the table and a whole load more to boot. Bust and demoralised, such people often have trouble understanding what’s gone wrong, having made such a profitable start. They remain obstinately unaware of the importance of playing the long term odds, certain in the knowledge they must be right, even though they’ve lost all their money. Exactly the same principle applies to gamblers on AIM stocks, especially those in the resource sector.
In case you were wondering what that strange feeling was, there is a powerful magic in the air today. So strong is this mystical force that we have witnessed this morning one of the rarest events ever to occur on God’s green earth. The board of Bowleven (BLVN) has actually managed to release an RNS without further destroying the company’s share price.
Three months ago, on November 13th, Bowleven (BLVN) hit its shareholders with this very damaging placement at 45p. The price of this fundraising was hard enough to stomach, but the real harm to sentiment was caused the day before. If the abrupt and “mysterious” drop in Bowleven’s share price on November 12th isn’t obvious evidence of insider trading then I don’t know what is. So far nothing has been done about this and I believe it is time for AIM Investigations Team and FCA to act.
While it might be a little unfair to suggest that as far as shares of Bowleven (BLVN) are concerned we are looking at the last chance saloon with regard to near term support, the reality of the situation is not a very happy one of the moment.
Bowleven (BLVN) had a very successful year in 2013 in terms of its operations but it didn’t stop the share price going into a spiral of decline. That is going to reverse in 2014.
Bowleven (BLVN) shocked the market recently with its cack-handed equity issue at 45p. The conference call that followed was, by all accounts, a disaster. But....
Bowleven (BLVN) may be a much loved and much followed oil and gas play, but this has not prevented the shares giving Bulls the runaround for many months.
In an exciting 2012, punters saw Bowleven (BLVN) shares reach a dizzy 102p. At a fundamental level the oil mid cap seems to have made strong progress yet the shares trade back at just 59.75p, valuing the company at £173 million. That seems largely a result of sectoral unpopularity and I reckon the shares are cheap.
Bowleven (BLVN) has been and remains a favourite of mine on the fundamental front. However, with the shares of the oil & gas group languishing around the 63p level and back to the levels seen at the turn of the year, the question that has to be asked is whether we are looking at a breakdown or a buying opportunity?
Bowleven shares have been and continue to be a personal favourite in terms of the oil and gas explorers, if only because at the start of the year they bounced just under 65p as was predicted, and then behaved themselves all the way up to a 100p plus target.
Having called Bowleven up from 65p to 100p plus at the beginning of the year, no one could accuse me of not being a fan of the stock.
I have to admit that I am rather biased in favour of Bowleven (BLVN) shares, largely because in the recent past they have obeyed technical analysis rules, or at least my own interpretation of them to the letter.
