re: Official Erin Energy (ERN) thread

Up 11.6% PM

I could see a squeeze today. If you assume the float is 9MM, and that has traded in a handful of days given the relatively low volume and cap, it could happen. No way to really know, but based on some quick math, it is possible.

What does your due diligence indicate about total float?

I still expect it to settle back in the $6.5-$7 range. That range is optimistic given their revenue projections based on only OYO wells, but their potential with reserves allows it in my mind.

If it wasn't for management/cashflow/company past, the reserves could be valued significantly higher but I just don't see how you can do that without acknowledging the very real risk.


TL;DR

Given oil production and reserves, when adjusting for risk $6 is reasonable optimistic value in GenesChin's amateur mind

I wanted to make my first dancing bananas post, but somehow the gains have been erased in an hour. If ERN provided proof that a single drop of Lawal's tears could turn a gallon of water into gold, somehow the price would still drop. Heck, it'd probably drop to $3.

IG, there was a rather large bid-ask spread in this first hour of trading, and I noticed the spread was often large during the stock price decline over the past two weeks. Could you provide any insight into what that could mean? Generally it is supposed to happen when there is a low float or the stock is thinly traded. I haven't seen thin trading, and my rough calculations say the float should be 20-25 million shares, not including any shorted shares. So why have I seen large spreads?

quote:

---

I don't think the float is as high as your calculations are saying. Maybe 9-10MM. And maybe 6-7MM as a functional float. Could be as much as 3MM shorted right now.

---

I was doing manual calculations: 57% ownership by Lawal, 30% by PIC, 2.5-3 million shares owned by upper management and BoD, ~1 million owned by institutions according to Nasdaq 13F information, an additional 1.5 million bought by Lawal, etc. That gave me a range of 22-24 million, but there are obvious limits (such as hedge funds either too small or exempt from filing a 13F with the SEC and any shorted shares).

Yahoo Finance says 9.93 million and TD Ameritrade says 11.3 million (since Yahoo also says 2 million are short, I will assume TDA did not cut the float by shorted shares). I think I'll leave the float calculations to those with more information than myself from now on.

12% jump at the open

Kinda new to this and probably a stupid question.

could you explain the relation between volume and stock price? does high volume usually push the price up?

feel free to explain it like you're talking to a 10 year old

quote:

---

Volume shows how strong a stock movement is. Think of a supply-demand graph in economics. Increased demand=price increases. Increased supply=price decreases. The volume, along with how much the price went up, should indicate how much increased demand there is. And the more demand there is, the harder it will be for the price to reverse because it'll take demand to drop and/or more supply to become available. Lighter volume=less demand to overcome for the price to reverse.

Make sense? If not, I can try to come up with an explanation for a 10 year old like you suggested, but let me think up a fart joke to use in it and whether I'll use superheroes or dinosaurs in my example.

---

said a different way....

increased volume shows conviction in the move whether it be up or down....

I bought a shitload of shares at 4.55 2 days ago... Gonna try to hold em !

I read the article but being young and new to Finance, can someone explain what that means going forward for ERN?

Thanks