Our tale so far:
Alange says it messed up.
Alange explains what went wrong, I see the CEO on TV.
I note that board member Horacio Santos sold all his shares a big 3 weeks before the restatement.
Alange Energy board member Horacio Santos had always planned to sell his shares before the end of 2010 for tax reasons, board secretary Peter Volk said in a phone interview.
He had been restricted from selling earlier because of transaction, Volk said.
“I have spoken to him and he understands the rules about insider trading and is satisfied he didn’t have any inside info when he did sell those shares,” Volk said. He said the reporting errors were all found in the new year. I asked whether people in the company had any sense that they may miss the forecast 8,000 barrels a day by the end of the year, and he said no. “Until we started looking at these things more closely there was no expectation that the numbers we had published were off,” he said.
To explain to those readers not versed in stock markets: It’s ok for an insider to buy or sell shares, as long as s/he doesn’t have any “material, non-public information” at the time of the transaction. It’s clear that Santos sold a bunch of stock while the share price was elevated by misinformation. What’s not clear is whether he knew that it was misinformation.
Meanwhile, CIBC has cut its target price on the stock by 71%, to 20c. That’s below the current price. Ouch? They say their big concern is the $47 million debt, which could make the capital expenditure program difficult.
Don’t tell that to the people who so far today have driven up the stock price 6% to 34 cents on 8 million shares of volume in the first 41 minutes of the market session.