Let me run this up the flagpole and see who salutes, okay?
Before Hoov's first public reccy, which we'll say created the first broad interest in this stock, GNH was at 18 cents.
I propose that the entirety of the price increase we saw since then was a bunch of followers piling in and buying up the share price based on the outlandish hypothesizing that used to go on in the forums about how GNH was the next Osisko. Basically, hype created demand, which outstripped supply, and so GNH shot all the way up to the 90s.
The recent price depreciation from 90 back to 35, then, is just all that extra air being let out of the balloon. As the people who bought in now sell out, the price drifts back towards 18 cents, because demand for GNH shares is disappearing. So the price tends back towards its original equilibrium.
The above is only a theory. One thing that would help disprove it, and set a higher target for GNH, is whether this year's assays have proven anything about GNH's deposits that someone educated in geology didn't already know (or at least suspect) back when GNH was at .18 in January.
So have we gotten any new information over the past year that wasn't already known back then?
The corollary to this, btw, is that if no new assays come, GNH will eventually hit .18 again (and maybe overshoot in a final panic)... but if/when assays come out that prove the existence of gold beyond what we already know, then the price should go back up because demand will return and the price will seek its new equilibrium.
Comments?
