Great post Abbibun.

While it may be a coincidence that the share price fell 10% and Mr. Pett's article came out, the fact that there was a negative downturn to the stock on the first trading day after his article was released is cause enough for concern and possible investigation.

We are not talking about a small time newspaper here folks.  The US has the Wall Street Journal and we Canadians have our choice of the Globe and Mail or the Financial Post.  These papers are what the serious investors use each morning to make decisions.

Why do you think the Globe arrives on doorsteps at 4:00 AM?

I personally know professional investors who digest both the Globe and FP while brushing their teeth, grabbing a breakfast bar, and riding the elevator to their office where they spend the day watching the stock channels.

These guys don't have time to check the facts on every item they read in the paper.  The assumption is, if it is printed by the Globe or FP it must be true.  If it is not true there is repurcussions.   That is why these are two very respectable and trusted newspapers that have been around since Canada turned bark into paper.

If I read tomorrow that so and so executive sold 25% of their shares "to hedge their investment", I would likely sell too.  The first to the sell button loses the least.  And so it happened today when I watched the stock drop from 6.88 to 5.86.

There was no news today.  Except for what was stated as fact in the National Post.

$70 million dollars was taken off the table today.  There were likely many stop losses tripped on the way down.  You know how I feel about stop losses anyway so I won't get into that.

Noront has been the talk of Bay Street for the past month.  It has dramatically climbed from a low of .29 cents to $7.05 in just a little over two months.  When a reporter reports on the actions of Noront's president, people are reading and listening -- and ACTING.

I am not naive and I do know that swings and corrections happen.  I see them all the time.  But I also know that hedge funds will take advantage of any sign of weakness and short the stock when they feel that bad news or market sentiment is turning.  This leads to a self-fulfilling sell off as margins are covered, stop losses triggered, and fearful hands are shaken.

Mr. Pett's actions today fed an opportunity for the hedge funds to act.  He in effect created the turn in market sentiment today by writing an article based on false facts and assumptions.  His editor is equally to blame.

While I agree that many have benefitted from this (I accumulated more at $6.02), there are many including myself that also saw their portfolio values decline.

If this was due to a correction and profit taking, so be it.  But if it is due to the actions of a hack journalist, then action is required.  The problem is, there is not exact way to tell with the market as to why it turned.  The TSX was up and no news was released by Noront.  A nearby company (BMK) received 10M in financing and another (FWR) is starting to survey their lands, so I doubt this news caused the fall.

Maybe is was Mr. Pett's article.

There is a big difference between what Mt. Pett published and what Paul Van Eagen stated on RobTV.  The market knows that it is Paul's opinion and what he said was not incorrect.  It was not complete by any means by not incorrect at the time.

Mr. Pett's facts were unabashedly false and incorrect. 

But he is sorry.  What a nice guy.

The funny thing about apologies are that they mean nothing so often as they cost nothing to say.  "Sorry I pulled the trigger".  "Sorry I stole your car".  "Sorry I lied and made money doing it".  We often hear this when those on trial for murder, theft, or embezzlement or insider trading feel remorse.  But it doesn't change the impact of what they did.  Lives are still lost, cars damaged, and money spent by somebody else.

I do not know what Mr. Pett's motives were for writing his article.  I am sure he is not an idiot so he unlikely profited from his article by either shorting high or buying Noront low today.  I question some of those who believe he is working on behalf of the funds, who may have slipped him some cash.  Again, very few journalists are this stupid nor unethical.  I do not believe Mr. Pett would go there.

If I had to guess what his motive was, it was to make a name for himself by trying to place a black mark on a President and his company the day before their AGM and less than a week after his paper covered the "Next Voisey Bay" story about Noront finding the next big thing.

In my opinion his desire to stand out from the rest blurred his vision and that of his editor.  He mentioned that the two names were close together on the insider transaction sheet he had for Noront.  But there is a night and day difference between Richard Nemis and Neil Novak, so there is a night and day difference in what he reported.

This has nothing to do with $50000 shares or insider selling.  It has everything to do with creating the appearance that the President of Noront does not have faith in what is being discovered or the potential of the company he manages.  That looks to be the aim of the wording in his article.  The use of the word "hedge".  And who better to know what is actually there than the president?  Thus the selling.

The most damaging statement in that article is not the misquote of the share price high (should have said $6.74 (close) or 7.05), nor the amount of shares.  It is stating that Richard Nemis sold 50,000 of his 200,000 shares.  That is 25%.

If Mr. Pett would have taken some time to read the AGM material, posted via a link on the front page of Noront's web site, he would have read that as of SEPTEMBER, 24, 2007, the following was true:

Mr. Neil Novak beneficially owned or controlled 100K shares and had an option to buy 200K more at .75 cents.

Mr. Richard Nemis beneficially owned or controlled 1,942,900 shares and had an option to purchase 1,300,000 between .30 and .75 cents.

A night and day difference.  This tells me that with only a small amount of shares in place since being a director in 2003, Mr. Novak has never been a fan of holding NOT long.  He sells the options as he gets them.  Otherwise this guy would have 1 million shares at .10 cents since day one.

Outside of selling 20K shares recently, it has been a long time since Mr. Nemis has sold a single share in this company.

To summarize, we need more than a retraction and apology.  We need an article that explains Mr. Nemis' Noront holdings, his lackluster trading history, as well as confidence in the company.

One hack journalist eroded the confidence in the Noront President today.  A confidence that is very hard to regain once rumor gets out.  I hope this gentlemen makes a career change and gets hired at Future Shop where he can focus on writing "correction" newspaper retractments for their flyers.  He does not belong anywhere near the National Post offices after this negative $70 million dollar day.  Nor does his editor.  Yes people make mistakes.  But not with other people's money.

M1.