US Oil & Gas – Why the share slide?

Having bounced back up from 35p to 170p shares in GMX traded joke valuation company US Oil & Gas (USOP) were starting to bubble. The USOPians (folks who chat amongst themselves on twitter and Bulletin Boards) were already discussing once again whether £15 or £200 a share was fair value. But then…. the shares started to fall once again and as I write are back at 90p. This still values the company at a very generous £37 million but why the slide? And what next. I offer three explanations.

1. In light of legal action taken against various anonymous BB posters who made what appear to be libellous remarks about the good ship USOP various BB operators have pulled the USOP boards. Since the shares were pushed up sharply on the back of BB chatter about ever more ludicrous target prices cutting off the oxygen of Usopian hype has choked off a supply of fresh buyers of the stock. As such there are just sellers. The share price on this matched bargain market was always thin anyway. As such the shares are slipping
2. The company pledged that it would start work on retesting its Ebiana 1 well in “November or early December.” It is December 17^th and there has been no announcement. I am just as much of a thick mick as the good Dubliners behind this company but I reckon December 17th and onwards is not “early December.” The lack of news might just be freaking out some folk.
3. The valuation was always a joke and at some stage the share price had to reflect that. I outlined why the valuation was a joke in an article published a few weeks ago. I stand by my conclusion.

You can read that piece here

It may all turn out wonderfully. In this festive season I say to the directors of US Oil & Gas with my hand on my black Ulster ( well Donegal but let’s not debate whether Ulster has six or nine counties right now) heart:

 Nollaig Shona mo Ceiltigh eile – mian leat an draíocht Airmid.  I ár n-oileán de fulaingt ní mór dúinn i gcónaí ar ár paidreacha

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Comments

1. Stuart Nimmo says:

   December 20, 2012 at 11:23 am

   I love you Tom.

   That is all.

2. Michael Davis says:

   December 20, 2012 at 11:45 am

   Stuart,

   You spelt loathe wrong.

   That is all.

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