TSC: Ivanhoe Has Nothing to Offer but a Broken Halo
biz.yahoo.com
Was there anything to Ivanhoe Energy (IVAN:Nasdaq - commentary - research) besides sponsorship? Is there anything worth owning at $3, where the stock is trading now, that was worth owning at $7?
Ivanhoe Energy has been an investor favorite, trading about 12.6 million shares a day during its surge in fall 2003, a huge amount for a stock its size. When a small stock becomes a market favorite, it's a sure sign to investors that the stock needs more scrutiny.
I took a long, hard look at Ivanhoe last week because I like the oil and gas sector and because I saw it get crushed by guilt-by-association: Thom Calandra, late of MarketWatch.com (MKTW:Nasdaq - commentary - research), had taken to touting the stock, albeit with full disclosure that he owned shares in the company.
Unfortunately, I have come away from my due diligence with a conclusion that won't shock the many vocal shorts of Ivanhoe: There was nothing to this company to loft its shares except Calandra's sponsorship. It's hard to argue that the move wasn't in large part due to Calandra's recommendation.
In my research on the company, I was looking for substance, but came up with nothing but frequent press releases. The company has no revenue and no real prospects, nothing proprietary it could build into a business worthy of the stock's sudden rise. Nothing, that is, except the promoter's halo.
What's amazing about Ivanhoe is that every time Calandra talked it up, the stock miraculously went higher. That is, until Forbes questioned the tie-in between Calandra and Ivanhoe in a Nov. 24, 2003 article, and a determined message-boarder demanded that the MarketWatch general counsel and the SEC do something to stop the reckless touting of a company that seemed more like a press release than a living, breathing entity.
What's so disturbing about Ivanhoe is that the company seems to be run like one of those Munder outfits, rushing to whatever is hot at the moment: synthetic fuels, Iraq and China being the latest themes hyped by the firm.
To me, now that the Calandra-Ivanhoe link has come asunder, this stock is a candidate to go right back to where Calandra found it and began sponsoring it: $1.
But this time, I'm talking $1 Canadian. |
