The recent performance of Sea Dragon Energy Inc. stock (CVE:SDX), (PINK:SDRYF) on the markets must have been a great concern to the company’s managers. Since New Year, SDX has decayed by 29% on the TSX Venture Exchange (CVE). In the last two days, the fall continues on rising trading volumes.
Yesterday, on the CVE the stock lost almost 10% on a record for the company turnover of over $15.5M shares traded. SDX took the first place for the most demanded item on the Canadian Venture Exchange. To the dislike of the company’s officials, the volume spike was accompanied by a drop in the price that even led SDX to a new year-low at $0.210. This comes on no new major company developments.
The shares’ fall might be related to the current political turmoil and riots in Egypt. In a release from today, Sea Dragon assures the public that these disturbances cannot affect negatively the company’s field operations, as the two concessions are located far enough from the urban areas of the country. Nevertheless, investors must have been worried by the distressful political events in Egypt, and this might have had a negative impact on the price of Sea Dragon’s shares.
Whether the stock will reverse its move on the charts in a positive direction, probably depends on how the disturbing situation in Egypt will develop in the coming days. So far, the financial state of the company seems to be sound enough, which implies that future appreciation of the shares is possible. At the end of September 2010, Sea Dragon had $18.76M in cash and $3.67M in revenues from oil sales. At the same time, it reported a net loss of $1.74M for the third quarter of 2010. These figures make it a bit dubious to predict how the shares will perform form now on, although SDX is very close to the oversold area.
