And the reason you bought CMKX stock was?
DJ UPDATE:IN THE MONEY:CMKM Diamonds Not A Girl's Best Friend
(Updated to add information about increase in authorized shares by
CMKM
Diamonds.)
By Carol S. Remond
A Dow Jones Newswires Column
NEW YORK (Dow Jones)--We may not know a lot about CMKM Diamonds Inc.
(CMKX)
but here's one thing you can be certain about: The company apparently
has a
mine
full of shares outstanding.
Trading data shows that, over the last 21 days, CMKM's daily volume
was
nothing short of monstruous with billions of shares trading hands every
day
but
three.
And on one day, Feb. 17, an incredible number of shares traded - 3.82
billion.
True, the stock traded from a high of $0.0003 and a low of $0.0001.
How big is 3.82 billion? That's more shares traded in this one stock
than
ALL
of the shares traded that day on the New York Stock Exchange, NASDAQ
and the
American Stock Exchange - combined. Those exchanges that day saw a
healthy
volume of 3.65 billion shares traded. And that's composite trading,
which
includes share changing hands on regional exchanges like Philadelphia,
Chicago,
Boston, etc.
There's also been so much trading in this tiny stock that it
accounted for
44%, or 3.36 billion shares, of Knight Trading Group Inc.'s (NITE)
average
daily
share volume in February.
All of which begs the question - who are these CMKM guys?
CMKM shares trade on the Pink Sheets, which means that the company
doesn't
file any financial information with regulators. So, investors looking
for
even
the most basic information about the company, like the number of shares
issued
and outstanding, are out of luck.
CMKM has refused to tell Pink Sheets how many of its shares are
currently
outstanding. 1st Global Stock Transfer, the companys' s transfer agent,
also
refuses to discuss that information.
Earlier this month, CMKM filed an amendment with the state of Nevada,
where
it's incorporated, to increase the amount of shares authorized by the
company to
500 billion from 200 billion.
Melvin O'Neil, a spokesman for company's president and large
shareholder
Urban
Casavant, declined to provide any information about the company. "As
soon as
Mr.
Casavant finishes to retire shares, he will put out a press release,"
O'Neil
told Dow Jones Newswires.
O'Neil said he couldn't explain the string of huge daily volume
experienced by
CMKM. Pressed to provide information about the number of CMKM shares
outstanding, O'Neil said "legally we don't have to provide that
information."
And guess what? In the unregulated world of Pink Sheets, O'Neil is
right.
CMKM, once Casavant Mining Kimberlite International Inc., stopped
filing
with
the Securities and Exchange Commission last July.
A look at Casavant Mining's filings shows that there were 7.24
billion
shares
outstanding as of Jan. 15, 2003. A Feb. 3, 2003 filing with the SEC
shows
that
Urban Casavant and his family controlled about 770 million shares, or
about
10%.
Unnamed majority shareholders meanwhile controlled about 7 billion
shares,
or
about 85.6%. The filing doesn't explain why the number of shares owned
by
Casavant and the majority shareholders add up to more shares than the
company
says is outstanding.
Timing is a little vague. but it looks like around the same time,
Cassavant
Mining issued about 560 million in a private placement to raise about
$2
million. Then, according to the filing, there were 500 million shares
issued
to
purchase an ancient Chinese jade collection appraised at $50 million.
Another
filing shows that in May 2003, another 1.06 billion shares were issued
to
pay
two consultants.
Adding all of these shares up, it looks like Casavant Mining had
about
9.86
billion shares outstanding when it stopped filing financial information
with
the
SEC.
Add into the mix a two-for-one forward split announced in August
2003, and
you
got about 19.78 billion shares outstanding at the end of September.
Then comes a number of press releases announcing the retirement of
billions of
shares. First six billion shares in September and then another 16.52
billion
in
December. It's unclear whether the six billion retired in September
were
part of
the 16.52 billion retired in December. If so, more shares would have
had to
have
been issued to allow 22.52 billion shares to be retired.
All this talk about shares retirement also begs the question: Why did
the
company need to increase the amount of shares it can issue to 500
billion if
it
has been actively retiring shares? (Retiring shares would in principle
give
a
company more room to issue new shares without having to raise the
amount
authorized.)
O'Neil wasn't immediately available Thursday to comment on the
increase of
CMKM shares authorized.
Since the beginning of the year, CMKM has put out seven press
releases
about
its supposedly burgoning mining business in the Saskatchewa province of
Canada.
None of these releases included any information about the company's
stock
other
than the new ticker symbol under which it now trades.
In a recent release, CMKM announced that it began drilling on
privately
owned
land in which it owns the mineral rights.
Company president Casavant clearly brimmed with excitement when he
told
shareholders in that realease that "We are pleased to have started our
drill
program two days ahead of schedule. We have secured funding for an
aggressive
six-month drill program and we are drilling on claims which CMKM
Diamonds
Inc.
owns the mineral rights. Equipment has been mobilized and we are
drilling at
this moment. We are drilling on targets that have the highest
probability of
a
kimberlite find. We would like to thank our thousands of shareholders
for
their
patience."
Good luck to shareholders drilling for information that most would
consider
routine. Hopefully, holders don't keep striking a dry well.
(Carol S. Remond is one of four "In The Money" columnists who take a
sophisticated look at the value of companies and their securities and
explore
unique trading strategies.)
-By Carol S. Remond; Dow Jones Newswires; 201 938 2074;
carol.remond@dowjones.com <mailto:carol.remond@dowjones.com>
(END) Dow Jones Newswires
18-03-04 1819GMT
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