stock cut off the up move and its price started falling down.Following the records, no particular explanation on the loss can be found. On the contrary, yesterday Silver Dragon announced that its 40% equity owned joint venture Sanhe Sino-Top Resources & Technologies, Ltd. has won an annual performance award from its Chinese parent company Gansu Shengda Group Ltd. for outstanding achievements in the exploration in 2010.
The positive announcement could be a reason for a pumping up SDRG stock price, however, it decreased instead. In this case, it is interesting what the next move of the stock will be.
Last week, SDRG was climbing up progressively due to other good news on its definitive agreement with Guangxi Hongteng Mining, Ltd., however, the up trend is already broken. Considering its previous gains, it turns out that it is not the first time when Silver Dragon climbs up on positive news. Actually, it looks like a regular practice of the company as the optimistic announcements have pumped up the stock price each time it aimed the bottom of the chart. However, at this point the final conclusions remain only future projections.[BANNER]
Regarding the 10-K report of Silver Dragon, the results don’t look much satisfying. By end-December, 2010 the company has issued a huge amount of common stock and incurred an accumulated deficit of over $36 million, while its cash on hand totaled only $96 thousand. Based on these results, the company’s management claims it is dependent on the issuance of common stock and loans to pay the expenses. The other options are achieving profitability or additional financing, however, none of these can be guaranteed.
