May 4/5 No stress.

Not much time left on this issue. It’s a soft deadline, not a hard one, both sides are free to ask for more time if they want to. There is at least two ways to look at it.

1) It’s the second extension, they never were too far apart, so no reason why they could not have it settled for May 4.

2) Alternatively no way can they settle by the 4th. It’s not just about overturning the veto, it’s about obtaining assurances that will protect the project from future halts, so they can raise more funding without risk to shareholders or to enable them to find another partner. The claim against the government also included claims for huge damages to be paid in the event the veto continues, and probably includes a request for reimbursement of damages already caused. These are difficult issues so expecting them finalized by May 4 could be asking too much?

One point to keep in mind is Alaska time zone is -4 from New York, anything discussed after 2 pm in court would correspond to after 6 pm on the markets, even after hours trading would be closed. So perhaps this is about May 5 more than May 4.

I don’t know what happened at the first extension. Did both sides speak to a judge in public, or in private, or in writing? Before 2 pm or after? Also the judge does not have to respond with a ruling on the same day.

At first thought this can lead one to think the market is ahead of itself, expecting too much for May 5. Then one has to consider that the shares have significant fundamental value that is being held back from the market value, and more and more people are likely following this story. If the market is disappointed on May 5, perhaps the share price would not sell off very much at all. If they are in a situation where all major points are resolved and they are just working on the minor points and making sure all issues are tied up, then any extension would not likely be for very long.

As we know, except for those involved nobody knows, all one can do is try for an informed guess. What I think is most likely is they will ask for an extension, but make it known they are close to a resolution. In that case, the shares could be unchanged or could increase somewhat on May 5, even with an extension underway.

I know well the risks in the markets, and I have been surprised, as in trapped, and have made serious losses overnight before. I am more interested in trying to connect the issues that are being dealt with here, with the perceptions people have about the share price. I am long NAK shares, perhaps more than I should be for my age, but still within a reasonable balance.

Anyways, I am not concerned about May 5, unlike some other trades in the past, I don’t feel like I am exposed to risk. Partly because I cannot seem to imagine a negative scenario, that I am able to take seriously.

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2 Comments on "May 4/5 No stress."

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I still have faith it will be resolved on the 4th! Remember you heard it here first lol (Fingers Crossed)

NAK Report

Very well said. Makes me feel better about an extension