Great Panther Shares Likely To Continue Limping Lower
August 16, 2011
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RELATED TICKERS: GPL
By Ian Bezek
Great Panther Silver (GPL) has returned incredible results to shareholders over the past two years. From a low of 14 cents during the great financial crisis to more than $5/share earlier this year, Great Panther has clearly been on a roll. From last October alone, shares quintupled, rising from under a dollar to their peak at $5.04. However, observers are starting to wonder if Great Panther has become a pump and dump operation that will leave investors preyed upon. The stock has fallen 40% in recent weeks, forcing us to ask whether the company's bullish story is still in tact.
There are often predictable phases within a typical Canadian junior miner's maturation period. A company will, seeking to draw attention to its unrealized prospects, hire some sort of Investor Relations team or PR firm to promote its stock. The company will then release good news such as positive drilling results, first ore production, a first-ever cash flow positive quarter, or other news of that nature. The stock will reach a great height and insiders will cash out, often moving their energy and attention to another junior mining firm. Then the stock will sell off as the hype dies down and the company transitions to being a more mature business with predictable operations.
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