December 7th, 2021 | 11:57 CET
Zoom, Prospect Ridge Resources, Twitter - New start after Waterloo
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"[...] We have a clear strategy for neutralizing sovereign risk in Papua New Guinea. [...]" Matthew Salthouse, CEO, Kainantu Resources
Correction in full swing
One might think that the stocks that were among the winners during the first lockdowns should also currently benefit from the newly emerged Omicron variant. But far from it. While Zoom and the German TeamViewer were able to multiply from March to December 2020, they are stuck in a sharp correction in the current phase. Growth slowdown is the buzzword that makes companies lose value from video conferencing or remote maintenance software.
It was evident at Zoom Video Communications when it announced its third-quarter figures. Revenue was up 35% to USD 1.05 billion, and earnings per share increased from USD 0.99 to USD 1.11. For the current fourth quarter, the Company expects sales of USD 1.05 billion. That would mean annual sales of USD 4.1 billion for the full year, up from USD 2.7 billion in the same period last year. While the numbers are still better than analysts expected, the growth momentum for the stock is slowing noticeably.
Investors acknowledged the presented figures with strong sell-offs and a daily loss of around 20%. Since the October 2020 high at USD 572.11, the correction is already almost 70%. From a technical perspective, an end does not seem in sight, and a fall back to the support area at USD 150 does not seem unlikely.
ARK CEO Cathie Wood took advantage of the recent price setback and, as reported by Handelsblatt, bought nearly 650,000 Zoom shares worth USD 133 million with her ARK funds. In addition to Zoom, Twitter and the neobroker Robinhood were also on the ARK CEO's shopping list.
Gold still undecided
As with technology stocks, the willingness to buy the precious metal gold is similar. There is restraint, even if the general conditions are still so brilliant. Sovereign debt, low interest rates, and high inflation are usually an Eldorado for every gold fan. But at the moment, at least in the short term, another sell-off to the target range around USD 1,620 per ounce seems possible. In the long term, experts agree, there is no way around the precious metal. At the latest, when it becomes clear that the high inflation will remain longer than expected, the starting signal for a new bull run should be given. Therefore, investors have enough time to stock their portfolios anticyclically with mining shares to be able to participate in the golden times.
The holy grail
An extraordinary project due to its size and suspected deposits, Prospect Ridge Resources maintains the 80,000 hectare Holy Grail concession area, on which 12 historic mines are located. There are several areas of rock on the property where gold can be seen even with the naked eye. In addition, Holy Grail offers world-class infrastructure and is bordered by two highways with rail lines and power lines crossing the property and a network of logging roads covering approximately 80% of the property, allowing for highly cost-effective exploration and sound feasibility. Exploration work revealed 117g/t gold and 578g/t silver at the end of November. Furthermore, there are indications of other metals on the property, such as copper, molybdenum and even lithium.
More recently, Prospect Ridge Resources, which plans to drill up to 20,000 meters next spring, again delivered good results, this time from the historic Dorreen Mine on the recently acquired Knauss Creek property. The property is related to the Holy Grail property on the east side of a large land package. Assay values returned up to 57.3 grams of gold per ton and 116g of silver per ton, 7.03% lead, 0.5% copper and 2.46% zinc.
Something is developing here
Michael Iverson, CEO of Prospect Ridge Resources, states, "We are excited to announce these outstanding initial sample results from the Historic Dorreen Mine and also that we have more results coming from the alternate portals to the north, and I can say the vein holds true in size and shows all the same juice." Mike Iverson continues, "This is one of four significant zones on this recently acquired Knauss Property, and they are all pointing towards each other with the Dorreen smack in the middle; stay tuned, there is really something cooking here."
The CEO, Michael Iverson, should know, he has been able to generate over USD 1 billion in market capitalization and raise over CAD 100 million of capital in his thirty-year career in the markets. The Company is well equipped with a cash balance of CAD 5 million and open warrants that could increase cash to CAD 11 million.
Interested investors should read the in-depth interview with Nick Luksha, President of Prospect Ridge Resources, in more detail.
Following the stock market setbacks, cryptocurrencies are also on a correction course. Zoom should still be avoided despite the sharp setback. In gold stocks like Prospect Ridge Resources, initial anticyclical positions would make sense in the long run.
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