Volume Spike Investor

GeoResources, Inc. (NASDAQ: GEOI) is seeing a huge surge in trading volume after the company disclosed it was selling 1.5 million shares of common stock in a private placement.  It is 1.53 million shares being sold at $22.50 per share.  The sale was conducted by Wachovia.

What is interesting is that these are unregistered shares and the buyers will also receive five-year warrants to purchase up to an additional 613,000 shares at an exercise price of $32.43.

These funds are being used to repay indebtedness and to fund exploration and development, acquisitions, hedging activities and general corporate purposes.

Shares are being smashed down in pre-market trading to $34.40 after 30 minutes of being open, and we’ve already seen some 670,000 share trade hands.  Average daily volume: 128,000.

To show how volatile this has been, its 52-week trading range is $5.60 to $24.30.

Jon Ogg
June 6, 2008