For graphite junior Zenyatta Ventures (TSXV:ZEN), which holds a rare graphite deposit, being the center of attention is nothing new. From praise to criticism, the Northern Ontario-based graphite company has seen and heard it all. But this week, the spotlight was rather strange.
On Monday, TheStreetSweeper drew Zenyatta into the public eye with an article that screamed at investors: “buyer beware.” The article starts off by pointing out that although the company has not yet produced a NI 43-101 compliant resource, it has been subject to a lot of hype compared to its peers in the graphite sector. On that basis, the author concludes that “if nothing else, the company knows how to sell a tantalizing story.”
Adding some confusion to the claims in TheStreetSweeper piece is the easy-to-miss disclosure at the end, where the publication casually mentions a short position in Zenyatta, also noting that it holds positions in other graphite companies mentioned. Clearly, while telling investors to be wary of investment in Zenyatta, the publication holds positions and stands to gain from price fluctuations.
Furthermore, the editor’s note clearly states: ”[a]s a matter of policy, TheStreetSweepe
Odd, isn’t it, that TheStreetSweeper has a short on Zenyatta?
In response to the attention from the publication, Zenyatta’s share price experienced negative price movements. From a morning price of $3.81 per share, the company was down to $3.08 by the end of the day. In quick response to the slanderous piece, Zenyatta released a note to investors, assuring them that it plans to defend itself against “unfounded and misleading information.”
By the end of the week, Zenyatta had recouped most of its losses and was trading around $3.67.
Then, on Wednesday, InvestorIntel supplied investors with an exposé called “Flagrant foul called on a convicted felon’s short-selling ‘hit’ on Zenyatta.”
InvestorIntel notes that the “hatchet piece” was written by Melissa Davis, editor of TheStreetSweeper, and published by Hunter Adams, a member of the company’s advisory board and a reformed stock manipulator with alleged crime family ties.
Not taking a crack at trying to explain any of the allegations against Zenyatta, InvestorIntel looks at the gains the “Clean up Crew” stands to make through discrediting the graphite junior.
But in the latest twist to this story, TheStreetSweeper withdrew a second Davis-bylined article, putting in its place a correction. The correction states that “the CEO of Zenyatta actually worked with a different Don Sheldon than the promoter identified in the article.” According to Stockwatch, Zenyatta CEO Aubrey Everleigh spent several years as vice-president of Donald Alexander Sheldon’s metalCORP Limited (TSXV:MTC); however, this Mr. Sheldon differs from Donald Robert Sheldon, a former Howe Street promoter, whom the article associates with Everleigh.
Zenyatta weighs in
Given the situation, one has to start wondering what the heck is going on.
Graphite Investing News (GIN) reached out to Zenyatta’s CEO, Aubrey Eveleigh, to help investors navigate through the facts and fictions in the latest claims.
GIN: In a situation such as this one, where Zenyatta is faced with such negative press followed closely by press that aims to turn the table, how can investors navigate through what is fact or fiction?
AE: Zenyatta reminds the investment community that all official information regarding the company must be derived solely from disclosure documents filed on www.sedar.com and on the company’s website, www.zenyatta.ca. All public disclosures provided by Zenyatta are full, complete, accurate and factual as required by reporting standards.
GIN: The most recent article published by TheStreetSweeper is aimed at debasing you personally. Do you have any comment on this?
AE: This is about Zenyatta or our unique graphite project, not about me personally. I would gladly debate anyone regarding our company/project.
GIN: Why is Zenyatta such a target for the spotlight?
AE: Zenyatta is completely different in the graphite space. We have discovered a very unique hydrothermal graphite deposit. People either do not understand what we have discovered or choose not to understand it. It reminds me of a quote, “we live in a society exquisitely dependent on science and technology, in which hardly anyone knows anything about science and technology.” — Carl Sagan
GIN: When you spoke to Graphite Investing News in June, you mentioned that Zenyatta will release a resource estimate in September/October. Is that still on track?
AE: Yes, I had mentioned that our independent engineering firm RPA would be completing their calculation in September and a resource estimate for late October. As of today this is still on track and we will update this timing in early October.
GIN: Further to that, if the report is coming out soon, it seems like the timing is right for someone to be attempting to discredit the company by tinkering with the stock price. Can you comment on this?
AE: I cannot comment on other people’s intentions. The company has come a long way in 12 months and will continue to advance a very special graphite project over the coming months. It is more important to stay focused on where we are headed rather than the day to day trading.
Securities Disclosure: I, Vivien Diniz, hold no investment position in any of the companies mentioned.
Editorial Disclosure: Zenyatta Ventures is an advertising client of the Investing News Network. This article is part of our independent editorial model, and not paid-for content.