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May 28th, 2024 | 07:15 CEST

RWE, Desert Gold Ventures, GameStop - Stragglers in the bull market

  • Mining
  • Gold
  • renewableenergies
  • Energy
  • Gaming
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Despite the fact that the US stock markets were closed yesterday for Memorial Day, Germany's leading index, the DAX, remained in the green. In addition to the major share indices, other asset classes, such as gold and Bitcoin, are generally in an overarching upward trend, which suggests that prices will continue to rise. Although the underlying assets are trading near their highs, companies from the relevant sectors are still far from reaching those levels.

time to read: 3 minutes | Author: Stefan Feulner
ISIN: RWE AG INH O.N. | DE0007037129 , DESERT GOLD VENTURES | CA25039N4084 , GAMESTOP CORP. A | US36467W1099

Table of contents:

    RWE - Further expansion on track

    The energy supply group's all-time high was reached back in 2008. At that time, the shares of Germany's largest electricity producer were quoted at EUR 102.20. But then came the downturn, and the RWE share plummeted by over 90% to EUR 9.13 by the middle of the last decade. Since then, however, an upward trend has emerged, and the share price has since multiplied to a level of EUR 44.16. This level has been tested several times in recent years without success, causing the RWE share to fall back to its current level of EUR 34.86. However, the next opportunity for a sustained breakout above this striking resistance level has presented itself again. Both the MACD and RSI have heralded the next upward impulse with "Buy" signals.

    The share of the Essen-based company could receive further positive momentum from continued positive news flow. Yesterday's announcement to further accelerate the expansion of renewable energies has already lifted the share more than 2% into the green zone. A decision was made to construct wind farms in the North Sea with a total capacity of 1.6 gigawatts. The planned wind farms, which will be located around 50 km off the island of Juist, will primarily supply industrial customers such as data centres with electricity. The project will be implemented in two phases. The first phase, with 660 megawatts, will begin construction next year and is scheduled to go into operation at the beginning of 2027. Construction of the second phase is scheduled for 2027, with commissioning planned for early 2029.

    RWE plans to invest a total of EUR 55 billion in renewable energy by 2030, with two-thirds of this investment going into offshore wind energy in the first three months. The Company aims to triple its offshore wind capacity to 10 gigawatts by the decade's end.

    Desert Gold Ventures - Greater scope

    After reaching new all-time highs of USD 2,450.10 an ounce, the precious metal is taking a breather and reducing its overbought condition over the past few days. However, the next upward impulse could start due to the mixed geopolitical situation and continue the overarching upward trend. If sentiment remains positive, exploration companies such as Desert Gold Ventures, which historically act as stragglers in a sustained bull market but could then outperform the base price with leverage, should also benefit from this.

    Desert Gold Ventures has made a clear case for rising prices in recent weeks. The Canadians, who own one of the largest land packages of any non-producer in western Mali at over 440 km², announced the second phase of their comprehensive exploration program in the SMSZ project area in Mali. This program plans to drill a total of 3,750 m with the aim of expanding the existing gold deposits and developing new exploration areas. CEO Jared Scharf stated that the Company aims to significantly expand its resource base through this carefully designed and strategically focused initiative.

    Completing a CAD 941,920 private placement will allow Desert Gold to significantly expand its drilling program. The proceeds of the financing will primarily be used to conduct additional RC and aircore drilling at the Mogoyafara South deposit and the southeast extension of the Barani East deposit.

    The SMSZ project is promising due to its location, with the producing mines of Allied Gold, Endeavour Mining and B2Gold in the immediate vicinity. With further drilling successes, Desert Gold, currently valued at CAD 13.68 million, should be able to further establish itself as a takeover candidate.

    GameStop - Revival of the meme shares

    We remember the COVID-19 era vividly. Due to lockdowns and perhaps out of boredom, the hype around so-called meme stocks emerged via the subreddit "WallStreetBets". After that, things became relatively quiet around GameStop and AMC Entertainment. However, in recent weeks, meme stocks have been experiencing a revival, boasting exorbitant price gains and high volatility.

    GameStop, a retailer of video games and merchandising products, seized the opportunity. Its share price rose by around 550% in the past four weeks and raised fresh capital at a significantly higher level. The Company announced on Friday evening that it had issued 45 million new shares last week, generating proceeds of USD 933.4 million.

    On average, GameStop received USD 20.74 in cash for each new share issued, increasing the Company's liquid assets from USD 1.2 billion to USD 2.1 billion.

    However, after the placement of the capital increase was announced, GameStop shares rose by over 13% in the US after-hours. Due to yesterday's holiday, the share price rose by over 40% at Lang & Schwarz.

    The completed capital increase enables Desert Gold Ventures to expand its current drilling program. RWE invests heavily in renewable energies. GameStop successfully used the run-up in meme shares to raise around USD 1 billion in liquidity.

    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

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    Der Autor

    Stefan Feulner

    The native Franconian has more than 20 years of stock exchange experience and a broadly diversified network.
    He is passionate about analyzing a wide variety of business models and investigating new trends.

    About the author

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