Kaloyan Gadzhev

Bering Exploration, Inc. (PINK:BERX) Crashes Below the One Dollar Mark

by Kaloyan Gadzhev April 19, 2011
Bering Exploration, Inc. (PINK:BERX) to begin its initial four well drilling program; engages firm to provide drilling services for its Eagle Ford prospect; drilling operations have begun on its Gulf Coast prospect. Sounds good, right? Wrong!

BERX_chart.pngThe announcements above were released on Apr. 11, Apr. 13, and Apr. 18, respectively. While the first one managed to get BERX to new 52-week highs in both price ($1.60) and volume, over the following sessions the price kept falling on significant volume. Yesterday BERX closed at $0.85 on 428 thousand shares for a 26.72% drop.

It looks like someone has been dumping a lot of shares these days, and the company's idea to keep on publishing news, even after it saw the start of the decline, may not have been the best decision for shareholders.

A possible reason for the drop, other than a dump, is the latest 8-K BERX filed with the SEC. It reveals the company has issued convertible promissory notes on Feb. 28 with a principal value of $500 thousand and "...the note holders may convert all, or a portion, of the Convertible Notes and related accrued interest into the Company's common stock at $0.50 per share." The 8-K in question was published on Mar. 3, which makes it an unlikely reason for the current drop.

BERX_logo.jpgWhile we cannot be certain whether the recent performance of BERX is due to a massive sale on the news, or a delayed reaction to the SEC filings, the fact remains that the stock has lost approximately 46% in a week. This is good news for the shorters who were at the profitable end of the transactions on Apr. 11 - more than 50% of the volume in that session. This, however, doesn't mean BERX cannot bounce back. If it is indeed a sell-off, when it is over the price could recover.

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