Resource Maven

Free Articles

Mailbox: Free Trade Dates

Good question! and good reminder that I need to explain these things often, as they are far from easy to figure out.

When companies finance - raise money by issuing new shares - the shares issued are NOT free to trade for the first four months. (There are a few kinds of financings where this is not the case, ie where shares are free too trade immediately, but those are the exception rather than the rule in the junior space. The two main ones are direct listing IPOs and prospectus offerings, which is a kind of financing used by larger companies.)

Whatever a share price does in those four months, the investors who bought in the financing have to hold their shares. If the share price appreciates notably, you can understand that these investors are then keen to sell into the strength when they are allowed to do so.

Sophisticated investors, which here means investors with margin trading accounts, can start to sell their financing shares as much as two weeks before the free trade date. regular investors can sell on the free trade date.

Companies try to place financing shares with supportive investors but that’s an imperfect art, because even supportive shareholders will sell some when a stock has multiplied!! Such was the case with Empress, the financing for which was at $0.20 and came free trading last week.

Free trade date selling pressure is also more when the financing included a warrant component, because then investors who remain bullish on the story can sell some of their holdings into strength while remaining comfortable that they retain exposure to the upside through their warrants.

It’s one of management’s jobs to try to manage the impact of a free trade date. That can mean talking to investors about how the free trade date period will likely represent an entry opportunity; it can mean lining up news announcements for that time frame; it can mean reminding shareholders of news that it still pending, and so on.

Newsletter

In her letter, Resource Maven explains what she is buying and selling, and why. Maven has bought into several of the markets best - performing stocks well ahead of the curve. She regularly identifies exciting new exploration opportunities and manages the inherent risk by selling some into speculative gains. And the mine builder and operator stocks that form the basis of the portfolio give strong, ongoing leverage to the rising prices of gold and silver. She has your precious metal bases covered.

Recent Posts

Testimonials

Thanks for all your hard work, but especially your honesty and integrity. I can feel your desire to take of us through your writing. As you have recently written, that is not always the case in this sector….I’m sure your new subscribers have no idea what they are in store for. I have almost doubled my portfolio since the lows in March. I would have done even better if I could have exited my positions when you recommended them, but I was overseas and unable to act. I was okay with it as I knew from experience it would bounce back. and boy has it AND ITS JUST STARTING!... After many years in the red, all but of a couple of stocks are in the green. The daily rise in my portfolio is unbelievable. And a lot of that is happening is because I trusted you. I’m afraid I’m going to need the benefits of your hard work and wisdom to once again help my family and because of all your hard work I’ll be able to if they need it. I can’t thank you enough for the sacrifices you make to make what you do possible. If your religious at all, you really are doing God’s work. You are making a difference in many peoples lives.

Blessings upon you and your family.

Sincerely,

PM

-PM (June 1, 2020)

Gwen:

You were 100% right in todays prediction. I bought in at the times you said, in the method you said (Twice) I have enjoyed the gains!

Thank you for your help and guidance as always.

-EB (April 12, 2020)