Key points:
- Caerus Minerals shares are up 96% this morning
- There's no official news to explain this so why is it happening?
- There is an announcement about Caerus Ventures, an entirely and wholly different company
Caerus Mineral Resources (LON: CMRS) shares are up 96% this morning and there's absolutely no news as to why. We have checked with the company (answerphone) and with the brokers, who are “in a meeting” and so we're left puzzling through the limited information available to try to decide why Caerus shares have jumped in this manner. For it's absolutely vital that if we try to trade a share price movement we grasp why the price is moving. Even if we decide simply upon a momentum strategy we still need to know what's driving the momentum – without that we can't try to decide when it will end.
The last corporate news we have through the stock market, the place where any material news should turn up, is that the licence on the Kalavasos Project isn't going to happen. This seems unfair, given the background to it, but there we are, mysterious are the ways of governments. That announcement led to a perhaps 40% decline in the Caerus Minerals share price.
That decline from near two weeks back is what has been reversed so far today. The 60% and change rise today does make up for the decline of the past couple of weeks. So, perhaps that licence is now back on? That's a possibility, of course it is, as that original decision looked a bit odd. But if it is back on then there should be an announcement. It's material information that needs to be disclosed. It would not be a good idea if this information was known to some select few and not to the wider market. There's some gossip of an investment (possibly EV Metals) for example. But that should be public news before it moves the share price. It's also possible that the rumour is backcasting, looking for a reason for the price move.
Also Read: The Best Copper And Mining Stocks to Watch in 2022
Another possibility is simply a pure momentum trade. Perhaps some think that the licence decision will be reversed, they buy in, that moves the price and so more buy in again. That's pretty much what a momentum trade is, moving prices make prices move more.
There's a third possibility that also needs to be thought about – nominative confusion. There's no news from Caerus Minerals at our pixel time. But there is substantial news from Caerus Ventures. The Near Foundation is launching a $100 million fund to develop Web 3.0 (3.0 being the terribly fashionable “web plus crypto” idea) along with Caerus Ventures. The point being that Caerus Ventures has absolutely nothing at all to do with Caerus Mineral Resources.
We might say that such confusion over corporate names does not happen. Ah, but it does – sometimes. As happened with ZOOM: “Zoom Technologies Stock Soared a Whopping 56,000% Because People Are Confusing It With the Zoom Video IPO”.
Now, we, at pixel time, don't know which of – or of any other possible ones – is the true reason for the Caerus Minerals share price surge. There is no public information to explain it. We have a tendency to believe the name confusion one. But that's not enough, a tendency. Anyone thinking of trading this CMRS price surge needs to have a firm view on what's causing it – for only that will produce an idea of how far it will go and in which direction in the end.
