Alange Energy Corp. (CVE:ALE) (PINK:ALNGF) stock price has bounced the resistance near 35 cents as traders remain guessing the outcome of the ongoing changes within the company.
Somewhat of a short term uptrend attempted to form over the past week, but it looks like it can turn into a bumpy ride. The short term price appreciation relates to Alange’s actions addressing the problem, but there are limiting factors as well.
The company is restructuring their balance sheet with $60 million worth of units offering. The proceeds will help to cover $22 million of bank debt and provide general working capital for the development of exploration projects. However, units are offered at 30 cents per piece though, creating an artificial support/resistance at this level.
Amid the drastic changes, that include 40% cut in G&A through layouts, the CEO has also stepped down, but will provide further assistance by remaining on the board of directors.
ALE stock incurred a humongous value loss on January 15, when the company said their production was lower than previously disclosed. The news was followed by a selloff among traders and insiders alike. The new units offering might throw off the recovery and lead to consolidation. The price is currently stuck in the 30 to 35 cents channel and trading volumes, though mostly slightly larger than average, remain conservative.
