This 12/2 initial press release from Infinity Energy Resources Inc. (IFNY) set off this kind of Supernova-esque chart:
And after shorting at first at $1.50 (call me skeptical), I covered at $1.47 because the stock just didn’t tank very much at all…and as TIMalert subscribers learned within seconds of my trade Friday, I bought 6,000 shares at $1.85 as I said in the alert:
Execution took forever, Thinkorswim wouldn’t even execute so I used Interactive Brokers…weird Pink sheet stocks…I’d never chase them, but this looks to be the beginning of a nice up move…Just as I said in my premarket watchlist I might buy, I would take a bigger position if the volume was more, as this is a rather perfect setup, very low risk considering it consolidated in the 1.60s…goal is to sell in the mid to high 2s…after all its 3 billion potential barrels of oil…LOL…I don’t believe a word they say, but I’m willing to bet others will get excited and they could easily come out with another fluffy press release hyping themselves up…mental stop loss if it can’t breakout past this key 1.88 resistance
I took an hour to listen to the company’s conference call, visit company website and click link on left hand side, here’s what I learned:
Management claims oil find is worth $1,000/share, but they’ll need $40+ million to fund the operation so they’d be happy with 10-25% final stake…giving them a valuation of $100-$250/share…they took a more conservative approach saying likelihood is only 20% so that’s $20-$50/share…I’d be ecstatic with $3/share 
Management are not taking salaries and even named a potential partner for this project, $12+ billion Noble Energy, Inc. (NBL)
I like that they had such an open conference call, verrrrry rare/never happens with Pink Sheet companies…even skeptical people on the call asked why wouldn’t just Exxon Mobil Corp. (XOM) takeover IFNY at $5-8-12/share to potentially own a multi-billion dollar oil find…management replied it’s all happening fast, they need time for more data (in the next week from December 10th means this coming week we should hear more, which is probly what’s causing the stock to breakout, on hopes of more detailed info (potential risk of bad info too))
Most importantly to me (because there’s little chance I’ll stick around for more than a few days), they said they will get their financials in order in the next few days and are taking tons of meetings with financiers & potential partners in January/February (stock chart is strong and other than bad updated oil find info, this should rise on news of SEC filings & anticipation of partner news in the next month)
All in all, I’m pretty happy with this play–this little $35 million company is risky, but the upside is ginormous, short sellers should be scaredddddd….non-buyers should listen to the conference call and see this is no ordinary Pink Sheet company.
I still don’t believe the company found the oil, but I do like that there is a great amount of anticipation that should help this stock move higher over the coming week and with the right press release, I’d love to sell in the high $2s or low $3s. Small position and already consolidated stock chart means my risk is low.
Tags: Oil Stocks, Story Stocks, Supernovas
