While conducting research for the Blasting News series "The penny stocks of Kirkland Lake," it became apparent that charts for several companies with stocks listed on the TSX Venture Exchange appeared to be missing adjustments for reverse splits, also called consolidations. In the series, as well a feature on Goldstar Minerals Inc. (TSXV: GDM), the benefit of charts missing consolidations to a person or group looking to distribute stock into the hands of the uninformed was discussed. Missing consolidations result in misleading historical prices, charts, and performance figures, hampering the ability of investors to make informed decisions.
The discovery led to a systematic investigation of the shares of each company listed on the TSX Venture, with some surprising results. So far, after examining companies that begin with A and B, Stockhouse.com appears to be the leader for charts missing consolidations among stock market data providers. Examples of missing consolidations from others, such as BigCharts.com, Yahoo Finance, and even the Toronto Stock Exchange website, have been presented to readers, as well. Presented in the gallery are charts from TSX Venture Exchange-listed companies that appear to missing consolidations with Stockhouse, as well as corresponding charts with BigCharts, which appear to be error free.
False technical breakout for BSI stock?
One common method used to judge supply and demand in the market for shares of any stock is the technical breakout. Used by both intra-day and longer-term traders, the theory behind the technical breakout is that when a stock hits new high ground, supply of shares has been exhausted, with buyers overwhelming sellers.
Stocks trading at new highs also face less resistance and have a tendency to move quickly. Many investors who buy technical breakouts use stop-loss orders, among other measures, to manage risk.
Currently, multi-year charts for Blue Sky Energy Inc. (TSXV: BSI) stock with Stockhouse show it breaking out to a new price high, above what it shows as a multi-year high, $0.50 printed in June 2011, in October 2016.
However, BigCharts shows the same June-2011 high as being just over $9, with the October 2016 move only registering a small blip, rather than the sea-change breakout shown with Stockhouse. Data with the TSE agrees with data from BigCharts.
Blue Sky was named Brookwater Ventures Inc., before July 2016. Brookwater completed a one-for-19 share consolidation on December 31, 2013, the adjustment for which appear to missing from the Stockhouse chart, leading to the appearance of a breakout, when it seems that there was none. Recent buying appears related to a "resource evaluation" of the North Salah ad Din oilfield in Iraq. Despite these developments, revenue and earnings per share expectations remain elusive.
Blue sky companies led to blue sky laws
In the early days of stock trading, the term "blue sky mine" was used to describe companies that sold shares to the public, despite dubious prospects. As a result, regulations known as "blue sky laws" were brought into effect in most U.S. states in the early 1900s. Blue sky laws are designed to protect the public from fraud.
"When a promoter by artful persuasions succeeds in getting money for something which has no value except in the mind of the credulous purchaser he is said to have been selling 'blue sky,'" was how the June 5, 1895 Castle Rock Journal described the practice, as reported by Gerber Law.
Other charts from Stockhouse seeming to miss consolidations, for companies beginning with B, include Black Isle Resources Corporation (TSXV: BIT) and BC Moly Ltd.
(TSXV: BM), both of which have lost over 95 percent of their value over ten years. Neither has staged seeming false technical breakouts on Stockhouse charts as BSI shares appear to have. Data from the TSE website agrees with data from BigCharts for both BIT and BM stock.
Next in the Blasting News TSX Venture Exchange missing share consolidation investigation: the Cs.
