The bottom line to today’s somewhat disparate analysis is that on the financials alone, JAG doesn’t add up and the heavy waterfall drop we’ve seen in the stock price these last few weeks has only brought it down to the level at which it deserves to be priced today. There is the potential for share price appreciation and there’s even the chance that some third party that thinks it can do a better operational job at its assets might move to make a hostile bid on the company, but right now I doubt that will happen. The problem here is that if things stay the way they are, the current $2.32 share price can go a lot lower just by letting JAG keep on keeping on and dragging itself further down so why should a potential buyer pay $4 or $3 per share when it can wait a while and pay $2...or even $1? These last few weeks have seen the market change its attitude towards JAG, the trust and hope is gone and the world is turning its back on this company, and that’s about the worst thing that can happen to any going concern. We’re now at the point where JAG can put in a good quarter and people will still mistrust it as an investment vehicle and consider it a single blip. Until something happens to change JAG at its most basic level it’s not a stock I’d want to take a risk upon, even at these low prices.Those of you that like them distressed and very high risk may feel like running a trade on JAG, but if you do, be clear that the company might have come down from $6 but it’s not going back up there again in the near future, and unless things change drastically at the company (e.g. debt removed, gold goes to $2,500/oz, qtr production jumps to 60,000 oz) it will never see those levels again. The chances of further depreciation in this share price are high, so the risk of buying at today’s levels should not be understood as “well, it could drop to $2 i suppose”, because the low end potential is zero. If current management is thrown out and people that actually know how to mine at a profit move in, it might be worth revisiting JAG but under status quo conditions there’s too much risk and not enough reward potential here
The low range price of zero now coming into sight.