Ever notice how ingratiating foul-mouthed posters on Raging Bull become when a "newbie" - a new investor - comes on the scene?
Like wolves falling on a bleeding deer, they offer up reams of "DD" - their so-called "due diligence" - to folks they hope will believe the highly speculative and very suspect information they offer.
Mixed in among them on both boards are a large number of innocent and well-meaning investors who are unaware of the true nature of their companions, or have an inkling but give them the benefit of the doubt. The wolves - some with multiple names and personalities on the mesasqage boards - curry favor for weeks and months, slowly building the confidence of new investors with promises of price explosions and imminent news, full of saccharine sincerity, only to sell against any developments that suddenly lift the share price even as they urge newbies and "friends" to buy.
Meanwhile, a stream of posters leave Raging Bull only to endure the autocratic and arbitrary manipulation of membership privileges on Investors Hub that is the forte of Gigwoof, chcr and whoever else is in charge there today. As on Raging Bull, there's little tolerance for free speech when it comes to a critical evaluation of the real propsects of ERHC Energy.
There's an abundance of it, though, when posters who want to offer rigged data as truth and wild fantasy as evidence for consumption by the newbies. Their new dollars help set up their next kill, as most of them have enough cheaply purchased shares to let them profit mightily as soon as they can run up the price again. Some have even been identified in Barron's Weekly, the respected Dow Jones financial trade paper, as dodgy manipulators who repeatedly take in unskilled investors.
Many thoughtful investors who come to this blog write me to comment that it is a great relief to find a reasoned voice that respects both truth and evidence - and free speech rights - here. While we won't suffer abuse, we do gladly invite posters to express any opinion they like that is germane and cogent on the future of ERHE. The future is by definition beyond our vision, and guesses about it that are either optimistic or pessimistic are just guesses, and we know that here.
So what is my opinion?
ERHE looks good to go for the $1 mark over the next month as awards letters are received (Pioneer, ERHE's partner in Blocks 2 and 3) has already gotten theirs, and we suspect ours is also in hand for Block 4, which we will develop with Noble Energy), production agreements get finalized and the indecision of the awards process that tainted so much of the past two years begins to fade away.
Many investors worry, as they rightly should, about the wisdom of investing any of their hard-earned money in anything that has a Nigerian partner. The country has become so famous for corruption and fraud that the recent efforts to fight it have won international praise.
They should be concerned that a Caymans Island firm with dubious reporting obligations has become the respository of about 42 percent of all the company's stock, and should wonder whether ownership of the corporation and its Gulf of Guinea assets could also be passed to a Caymans Island shell.
They should also be very curious about the relationship between Nigeria's fastest-growing bank, First Atlantic Bank of Nigeria PLC, which has the other eight percent required to complete a Nigerian majority. The bank won its 63 million shares of ERHC Energy from Sir Emeka Offor in November of last year, and the transfer of those shares kept the price depressed for months. But how will those shares vote on a company sale or massive assets transfer? That is an unknown.
We have long felt that Sir Emeka Offor is an honorable man who is nonetheless a very sharp dealer. He maximized the value of his stock by loaning money to the company at high interest rates and paying himself back in shares, as it earns no cash. That has diluted the value of what is, after all, only a paper security until oil starts from flowing from one of our new concessions.
Mr. Offor has been very, very slow to communjicate with shareholders, and often those communications - especially the SEC reports - have required multiple corrections. The company's principal spokesman, John Coleman, is notorious for failing to communicate, and has now revealed himself as a major inside seller of the company's stock.
Meanwhile, Raging Bull posters - and the second-tier people on Investors Hub - assure newbies that Offor is "a billionaire," as though the billion was in dollars and not in Naira, the Nigerian currency, which is subject to wide fluctuations and generally sells for 133 to the dollar. A Naira "billionaire" only has seven million US dollars.
Moreover, it appears that every other aspect of Offor's business had been mortgaged to the hilt to carry him through ERHC's expensive rebirth as a major oil company. His newspaper, banking, and insurance businesses appear to be non-existent, and there is no indication his bedrock company, Chrome Energy Services, is doing well in Nigeria's superheated financial environment.
The problem, of course, is that when any of those businesses leave him gasping for cash, he has to get it from the sale of his stock or from the issuance of new stock.
We're sure he is reluctant to do that, but we have no doubt he will do whatever it takes to survive among the rabid wolves of his industry.
All of this information may sooner or later come out on Raging Bull, probably in the ambience of an teenage food fight presided over by the greedy, illiterate inside crew of fact-dodgers, and whoever posts it on Investors Hub will be earmarked for extinction by the censors there. That is how ERHC On The Move can contribute.
We do believe in the ultimate probity and fairness of Sir Emeka Offor, but we know the investors who manipulate both of those message boards are people of malicious and probably criminal intent and we trust them far less. They need to be ingratiating to newbie to suck in their new dollars so that they call sell into them, leaving the newbies holding a damaged hand. Caveat emptor.
What's up this coming week? We suspect that there will be light volume until the awards letters are confirmed about two weeks from now, and then only burst for the next month or so until the production agreements take shape. It's really a good time if you're a newbie - to invest your money somewhere else for the short term.
Stop back here in early August, when we expect a nice solid move to the upside that will last for a coupl of weeks, decline, and then improve toward the Christmas holiday and sharply improve next January and February. There may be some good buying opportunities this week under $0.50, and I think we are unlikely to see high of greater than $0.57 or $0.58. But, as we said, that's our opinion.
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2 comments:
Art and Joe, you guys were urging people to send report to SEC. Have you done that?
Anyone who followed my advice to sell on Friday before the awards made a lot more money than they would have, including wallog0, who waited until $0.435, according to the message boards, and then lost a reported $30 to $40,000.
I correctly told investors months ago that de Menezes would hold out for the highest bids, which he successfully did, and was fiercely attacked for saying so. A the time I said the stock would fall to $0.50 as a result, and in fact it soon fell to $0.51.
In the past week, for instance, I said the stock would generally move within a certain range and was usually very close to right every day.
I put my name behind what I write, while nameless cowards attack me without relenting. My advice has consistently been far better than any other advice available, and my reporting has been far more accurate than that of most of the major reporters covering ther stock.
Beyond that, I was responsible for the original front-page Houston Chronicle story that drive the price higher and brought in many hundreds of new investors. Compared to what my critics say, and do, I have a shining track record I am very proud of.
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