Gediminas Jasionis
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Decade Resources Ltd. (CVE:DEC) (PINK:DECXF) Stock Price Dances With Couple News In Effect

by Gediminas Jasionis Nov 26, 2011
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dec_chart.pngDecade Resources Ltd. (CVE:DEC) (PINK:DECXF) stock price experienced a shaky rollercoaster-like action as the company posted a couple news announcements of contradicting nature.    

DEC dropped 15.4% on Friday erasing all of the gains from the previous two trading sessions. The daily trading volume was nearly 1.6 million, more than 6 times the average of 241 thousand.

Technically, the price action is getting heavier and more volatile as the dominating downtrend approaches a support zone at 10 cents per share. However from the point of news affecting the action it appears the price could go below this value rather easily.

The selloff rate increased when the company said, amid Friday's trading session, they are going for a flow-through private placement of up to $2 million. Decade plans to sell 20 million units at 10 cents each. One unit incorporates a common share and half a share purchase warrant, convertible at 15 cents.

The potential dilution to shareholders from this offering is 55.7% and on top of that they are selling units below the market price of their stock. This shows how weak their business is and encourages further stock price decline.

decade_resources_logo.jpgDecade needs these funds to continue exploration work on their British Columbia properties.

But this was only a partial cause of all the stock price volatility. Two days earlier, on November 23, the company announced encouraging drilling results on the Upper Montrose zone at their Red Cliff property. Assay reported good gold mineralization levels in eight drill holes with a most notable 18 g/t gold mineralization over 14.2 meters.

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