fucking amazing
this seems to imply these stocks only rise and fall based on speculation and volume, not actual value
?
Usually they rise when they release news that implies that they have a potential profitable business in future.
In this case the company was a mining explorer which discovered a large deposit while the commodity prices were high.
But having a large mineral deposit is useless if you can't mine or sell it as this requires the company to source large amounts of investment dollars in order to build mining infrastructure, etc.
Then you need end users to sell the product to.
This company is currently in the process of securing funding, investors and end user agreements in order to build a mine. The price is low due to the uncertainty of this. Once this in in place the price will rocket up again. If not the share price will dwindle down to a cent or less as the company is essentially worthless, making no income and yet still needing money to pay its employees. It needs to get this money by issuing additional new shares to the market (capital raising), which dilutes existing shareholders and pushes the price lower.
So yes its all speculation and a calculated bet when buying these types of companies.