Avalon Rare Metals – AVL.TO announced a bought deal. Usually stocks move lower shortly before financing announcements that are bad for shareholders. It was a rather weak day for most stocks and although a financing was about to come AVL.TO – Avalon Rare Metals acted extremely well. That’s a situation where you don’t even need to check the details. The dilution is minimal and terms obviously are acceptable for existing shareholders. The way the stock reacted before the announcement is very comforting.
That said the offering is scheduled to close on or about September 17, 2009. I expect the stock to move sideways and to hold up rather well during the next 2 weeks. Then the stock will offer much more potential for further price increases. The AVL.TO – Avalon Rare Metals chart looks excellent. With bullish looking charts like these you never know. The stock could just move up to 3$ despite the financing. Let’s see what happens.
Have a great evening!