Gediminas Jasionis
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Brixton Energy Corp (CVE:BRX) (PINK:PMBJF) Goes Up Inducing Rumors

by Gediminas Jasionis May 7, 2012
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brx_chart.pngBrixton Energy Corp (CVE:BRX) (PINK:PMBJF) stock price jumped up significantly on Friday and traders are speculating on a possible takeover by a bigger company. There was no official confirmation of such rumors, thus the real reasons behind the price rally remain unclear.

Brixton is in a tough financial situation, they have no cash to carry out exploration on the properties they own. But the properties are actually pretty decent and could thus the rumors of takeover have been circulating around.

BRX secured 133.3% increase in share price on Friday. The accompanying trading volume was massive as well, counting 3.7 million shares traded for the day. That is more than 15 times heavier than the daily average turnover of 243 thousand.

This was also a first serious spike up in over a year. The stock is still down over 63% compared to where it was around a year and a half ago when a similar spike up was recorded.

brixton_logo.jpgDespite the rather vague and choppy price action throughout the session the stock still got listed among the most actively traded stocks on the Canadian venture exchange. This could attract a lot of attention today, but since there was no direct news the action might serve the interest of bears.

The current valuation is still in a safe range comparing where other exploration stage companies stand. The price to book ratio is around 1.5, meaning the stock is not overpriced despite the lacking fundamentals. Correction to this rally might not come as a quick drop but rather a gradual decline depending on the engagement from traders at the beginning of the week.

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