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by Stockwatch Business Reporter

The TSX Venture Exchange fell 11.68 points to 792.87 Tuesday, but one issuer had a terrific day. Ken Ralfs's NEX shell, Angel Bioventures Inc. (DDD), resumed trading today and, in a glorious display of no liquidity, levitated 51 cents to 52 cents on 13,073 shares. There were 13 trades. Angel is working on its acquisition of Huayra Minerals Corp., a mineral explorer in Argentina. The shell will split its shares 5 for 1, leaving it with 5,944,220 postsplit shares issued, then issue 40,388,565 postsplit shares to its target's shareholders. The resulting issuer will be called AbraPlata Resource Corp.

The problem with this lack of liquidity arises when a thinly traded stock such as Angel finds its way to a high price, say, $10 or $15, in what appears to be orderly fashion. Then, for any number of reasons, the air comes out of the balloon, and the stock crashes. At that point, the exchange has a public relations problem, because if it can happen to one, it can happen to others. Using Angel Bioventures as an example, the issuance of 40.3 million more postsplit shares may or may not provide liquidity. It depends on how many investors will receive those shares. If it is a hundred, lots of liquidity; if it is five, not so much. In 1995, Angel first listed as an oil and gas explorer called Schwanberg International Inc. In 2004, it changed its name to Mystique Energy Inc. without a rollback. In 2011, it rolled back 1 for 10 and changed its name to Bella Resources Inc. In 2013, Bella rolled back 1 for 4 and changed its name to Angel. Then in 2015, Angel rolled back 1 for 10. As seen here, illiquid structures usually evolve.

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