By Dudley Pierce Baker
Founder – Editor
Common Stock Warrants
All markets continue to challenge investors and we are all feeling the pain, but, this too shall end and profitable trading days are in our future.
Today, I want to share two different approaches to investing – trading versus investing. Each investor must decide which is best for them, financially and emotionally.
On Friday, I established a trading position in CMRA, Comera Life Sciences, https://comeralifesciences.com/
This was previously a SPAC, OTRA, and OTRAW, OTR Acquisition Corp.
The merger was approved by shareholders on May 10 and the shares and warrants started trading under the new name and symbols as of Friday, May 20.
So, why did I buy the shares on Friday? Leading up to the shareholder vote, there was an unusually large number of shares redeemed by shareholders in a situation unique to SPACs. The shares are being referred to as a ‘low float of only 677,000 shares‘. There is a chance, not a guarantee, that the shares could be a short squeeze candidate driving the shares substantially higher in the coming days. My average cost of the shares is $9.30 and I expect to be out of this trade, by the end of this week. I am basically risking $1, 10%, per share to make a potential of 100% or more. I’ll let you know next week how I make out.
On the other hand, one investment position I have had for perhaps two years is Allegiant Gold Ltd. – http://www.allegiantgold.com
trading on the TSXV:AUAU and in the OTC markets as AUXXF. There has been consistent insider buying even up to around C$0.50 but the
shares have recently declined back into the mid- .30 range with the overall weakness in the markets. The company has a joint venture
with Agnico-Eagle and many exciting properties.
ALLEGIANT holds a 100% interest in 10 projects in the southwestern United States with 7 being located in the mining-friendly jurisdiction of Nevada.
ALLEGIANT has been one of the most active explorers in the gold sector. The flagship project known as Eastside hosts a large and open resource of 1.4 million inferred gold ounces and 8.8 million silver1 with excellent potential for substantially increasing the total resource at Eastside. The infrastructure at Eastside is considered excellent with water, electricity and a main statehight running near or through the property. Preliminary metallurgical testing indicates that both oxide and sulphide mineralization at the Original Zone is amenable to heap leaching.
I have full confidence that when the gold and silver markets begin to shine that we will be well served and the possibility of a 10 BAGGER.
The SPAC warrants continue to trade at undervalued levels that we have not seen since we began our aggressive coverage of this sector in September of 2020. Jeff and I believe we have reached ridiculous levels of undervaluation in the SPAC warrants. While it is always risky to call the timing for a bottom in any market, I believe we are there or very close. The ultimate risk for the SPAC Warrants is that the company will not be able to complete a merger. Getting to the finish line is the current challenge for these companies. BUT, if the SPACs complete their merger, the warrants will have a 5-year life and currently, we have many of the warrants trading for less than $0.10, yes, 10 cents and less. Something has to give and I am confident we will be rewarded for our patience and averaging down.
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