Little-known Gear International Inc. (GEAR) once fell into the category of deep value playuntil the latest development hit Wall Street!
The company controls a little gold stock you mightve heard ofWestern Sierra Mining Corp.
And for shareholders of record, theyre even paying a 5% stock dividend effective MONDAY.
Even before that, given all the assets on that balance sheet, GEAR looked shockingly cheap at under 2 cents a share.
Start with $13 million in assets they reported on their latest public disclosure that includes mining equipment, licenses, leases and stockpiled precious metal ore.
Thats not even counting the estimated worth of the gold-rich dirt on Western Sierras acreage back in November.
Add $200,000 in cash as of GEARs latest earningsspread across a rapidly shrinking pool of shares.
So gold prices have firmed up a bit over the last month, but theres still a lot of room before theyre back at their peaks.
Why is GEAR still under a nickel?
Management knows why. Theyre telling Bloomberg a rogue trader was shorting the hell out of the stock.
And coincidentally, regulatory filings show that short sales on GEAR have been HUGE recently.
But instead of just taking the abuse, GEAR fought back.
They cancelled 68 million shares, a full 30% of the float.
Suddenly, theres less stock out there for the rogue trader to buy back the next time he needs to cover that huge bet against GEAR.
Volume surged as the remaining shares met with oddly increased demandand as they say, volume led price action in this case!
The chart started sloping up again, sometimes taking big 100%-plus leaps.
Was somebody getting desperate?
You may not care about gold or the value of what GEAR has in the ground.
You may not find it criminal that this company is trading for under 1/3 of its self-proclaimed book value.
But if the bears got in over their headsand if the gold market is turningI think youll agree theres an opportunity here.
After all, everyone whos holding these shares on Monday gets an extra 5% for their trouble!
Get GEAR on your screen right away! Lets make this Friday one for the history books!