I talked to Mike Mullshine today. He said that a lot of shareholders are calling in very worried. I don't blame them.
Nine out of 10 times a stock falls like this, it is usually very bad. I personally feel this one is going to be the exception. I know the company has slotted so much money a week to buy back shares. At these prices they can buy back a lot more for the same money. As they buy back, it will all benefit us in the end by shrinking the outstanding shares and increasing each shareholders value.
The company announced when the stock was close to four cents that they felt the stock was very undervalued and that they would buy back any shares at three cents. It is my understanding they bought back 28 million shares in that offering. I personally do not feel there have been many sellers under three cents. I would speculate 45% of the volume each day is a naked shorting.
Over the last 16 weeks there has been over a billion shares
traded in the stock. I personally feel 450 million of those have been shorts. I heard estimates of 200 million shares
were shorted prior to that time. I don't know how the shorts are going to win. This company has too many good things going for it. I am sure that whoever is doing it feels that driving the stock down even at these levels they can win the game.
Here is weekly volume
07/14 24,804,076
07/21 49,014,364
07/28 34,436,342
08/04 82,727,762
08/11 49,513,180
08/18 70,576,796
08/25 103,067,585
09/01 55,784,154
09/08 36,941,056
09/15 75,676,822
09/22 72,171,702
09/29 103,583,622
10/06 57,591,320
10/13 78,222,026
10/20 113,136,452
10/24 65,211,895 This week so far
Total 1,072,452,000 last 3 numbers rounded off
In regards to all the worry about Murphy Sand and gravel.
They were very clear in their shareholder update press release
which was on September 26 that they were to legal actions in regards to the pit. I copied it below. The pits are a very small part of their business. They are talking about earning $206 million this year and only five to 8 million from the pits. This is not a substantial part of their business.
I personally get the impression that they are going to win.
The one suit they talk about winning millions possibly from the Mississippi bank.
Murphy Sand and Gravel - Installation of approximately $5 million of new mining equipment should be completed by the end of Q4. Once operational it should increase revenues at Murphy by $5 million to $8 million per year.
The Department of Transportation load limit restrictions cause the wide spread in increased revenues shown above. Once the load limits are eased, revenues could again increase sharply.
Phoenix currently has two separate legal actions ongoing relating to Murphy Sand and Gravel. Both actions have been ongoing for several years, but in the interest of becoming more transparent to shareholders we feel an update is appropriate.
The first action is between a Mississippi bank and Murphy Sand and Gravel.
Several years ago MS&G purchased several pieces of equipment from a Mississippi Manufacturer. The equipment was produced and a large amount of the purchase price paid. The equipment in question did not perform to specification and a settlement was made between MS&G/Phoenix and the company the equipment was purchased from.
The manufacturer in this case did not disclose to MS&G/Phoenix or the company the equipment was purchased through, that a loan was taken out by the manufacturer in Mississippi. That loan was defaulted on by the Manufacturer, even though far more monies were paid to the Manufacturer than the loan amount.
The Mississippi bank subsequently filed suit in Louisiana and even though it had no UCC1 filing on the equipment, convinced a local judge that UCC1 Law did not matter nor was it ever taken under consideration. Part of the equipment was sold to pay off the lien at the Mississippi bank.
Phoenix filed an appeal on the matter and has won on a 2-1 decision at the first appeal and 4-1 decision at the second appeal. Currently the matter is trying to be appealed (by the Mississippi Bank) to the Louisiana Supreme Court. MS&G/Phoenix is being represented by Attorneys, Thomas Schafer, George Denegre, Jr. and the firm of Liskow and Lewis before the Supreme Court.
Phoenix and its attorneys collectively believe that its efforts will be successful and that Phoenix will proceed to win substantial damages from the Mississippi bank (multi millions).
The second action is based on an ongoing legal action in which MS&G/Phoenix has sued the leaseholder on the MS&G site for repeatedly interfering with its business. Recently, a local Judge heard a motion from the leaseholder that M S & G/Phoenix had entered into sub leases which would be a violation of our lease agreement. Even though MS&G/Phoenix attorneys assured us that was not the case, the judge ruled otherwise.
Phoenix is filing an appeal that will set aside said Judgment until the Appellate Court and Supreme Court decide the issue. This will take time as this will probably establish new case law. The preponderance of evidence of law from the Appeals Court, the Supreme Court, and Louisiana Mineral Code make Phoenix confident that our efforts will be successful. Additionally, Phoenix will continue its efforts to come to a suitable negotiated resolution which could include outright purchase of the property.
In the interim the Company will continue to develop it's mining program and revenues are expected to exceed $8-$10 million in 2007.
