News

December 03, 2008

Broken Down Washing Machine Wipes $8 Million Off The Value Of Adamus Resources

Our Man in Oz

In Chicago, the board of trade has its VIX index to measure volatility - or fear - in the market. In Australia, they’ve invented the “washing machine index” to measure stock market instability. Well, no, actually they haven’t. But Minesite’s Man in Oz reckons someone ought to patent a washing machine measure after the experience of a small gold company that’s teetering on the verge of becoming a producer. Adamus Resources was the victim of the first known case of a “washing machine hose-down” when a woman in Sydney who needed A$800 to pay for repairs to her washer dumped 5,100 shares on the market without bothering inquire about the price. She took A17 cents from a bargain hunter (shark) when the market the previous day had been A22 cents. She was happy. But the Adamus management was flabbergasted, because the A5 cent price-cut she took knocked A$8 million off the company’s market capitalisation, a loss which re-defines the expression “being put through the ringer”.

The washing machine incident occurred on 27th October,  and can be clearly traced through the records of daily trades in the shares of Adamus, a company which has been hard at work for years, trying to get the Southern Ashanti Gold Project (SAGP) in Ghana to the starting gate. With the entire stock market delicately poised after the horrific collapse of all asset values during October, a single sale has lately been sufficient to tip the scales of any stock, and that’s precisely what...