Friday's are usually down days as swing traders take their paychecks for the week. Next week I say we hit at least a penny. No worries here. 2.6M shs strong. In my opinion over the next 12 months this will be trading in pennies then nickels ... making these current sub penny moves meaningless.
Another thought … I don’t believe any of the rumors of UPDV currently being acquired, but the concept isn’t too far fetched. UPDV has a great infrastructure in place now and is on the cusp of rapid expansion and growth. But they’re really feeling the growing pains. It takes gobs of cash to execute on their business model. Good model, but lack of capital. And raising capital through dilution really isn’t the answer for us shareholders, though it’s pretty inevitable. They just increased the authorized share count by 700M shares, and they did it for a reason. Beacon is expecting 450M shares outstanding by the end of the year, and in my opinion that number is a little on the optimistic side.
I really wouldn’t be surprised to see another O&G company with deeper pockets approach UPDV in the not too distant future. They’re taking notice. I have no doubts (especially with the shift from dependency on foreign oil to more domestic oil production). If you think about it, UPDV’s a perfect acquisition candidate; valuable assets, good revenues with very strong growth in revenues … just hurting for cash as the revenues from production haven’t caught up with the expenses yet. Someone with the cash can pounce on this opportunity and run with it. And you can bet that we would get a nice premium multiple for our shares.
I would still prefer to see UPDV do it on their own though, and if they can just make it through this cash crunch I think they have a pretty good shot at it … thanks to the high price of oil and natural gas, and more of that production coming online.
AI
