I find another post :
Announcement from a Subsidiary Turns into Trading Frenzy for Kodiak Energy Inc. (OTC:KDKN) Stock
By Petar Ilievski
Date: Jan 19, 2011
Huge trading activity reaching a new 52-week high took place during yesterday's session for Kodiak Energy,Inc.(OTC:KDKN, KDKN message board). Total number of shares traded reached 1.7 million, but the price decreased from $.31 to $0.23 per share. Strangely enough, the announcement made by a subsidiary of the company included only positive news about a project moving ahead of schedule due to financing in place and operational actions continuing at a fast pace. Now, it is also possible that the intense activity on the market was sparkled by something else as well, though evidence for such can be hardly found neither in the press and the corporate website, nor in conversations taking place in financial forums.
The sharp volume increase of yesterday is in fact not exceptional as it fits the recent pattern of development of Kodiak on the stock market. Since the beginning of the year, high volatility and unprecedented volumes marked its performance, which by the way were also without any immediate factor to serve as a catalyst for investors` interest.
Now, Kodiak Energy Inc. is an oil and gas exploration and development company in a growth stage. The company has rights to explore several projects in the US and Canada directly or through subsidiaries. All of them require a long-term strategy, thus the actual drilling and extracting process is to start only after the exploration stage is complete and the project is proved to be profitable. In this aspect, it is increasingly harder for the company to secure financing for its operations, as it is done on the basis of forward-looking statements and as revenues are yet to come. This is reflected in the last 10-Q report covering the first three quarters of 2010, according to which the current accumulated deficit tops $34 million, or roughly 25% more than the previous year.
Despite the positive news coming from its subsidiary Cougar Oil
and Gas Canada, in which Kodiak retains 64% of the outstanding shares, the future of the company holds far more uncertainty than positivism. The stock performance might attract traders` attention, but mostly for speculative deals given the unpredictability of the price over the last few years. Kodiak has been focused largely on acquisitions in the past few years, which obviously still does not pay off. Unless a major shift in the development plans of the company takes place, it is quite unlikely that any long- term investors would be dealing with the company's stock. Which can be disastrous as banks and other types of enterprises for securing finance often share the opinion exactly of the long-term investors, not the speculative ones.
