Employees at Chimera Energy (OTC: CHMR) are left to scratch their heads today after the company’s share price dropped a staggering 50%. At the end of trading yesterday, August 16, 2012, Chimera Energy was sitting at a respectable-but-not-great $0.80. Twenty-four hours later and the company is shaking in its proverbial boots after watching its stock fall 50% to $0.40.
In the month between July 10, 2012, and August 10, 2012, Chimera Energy climbed the penny-stock equivalent of Everest. It came out of the penny stock doldrums, suited up in fancy and respectable gear, and made the long, hard trek to the top. The company was rewarded for its efforts, just as any climber of Everest is rewarded when he or she reaches the summit. In that one-month span, the stock of Chimera Energy rose from $0.51 to $1.84. This is an impressive achievement for any company, let alone an energy company. It left analysts and the public wondering how high Chimera Energy could climb.
The thing about Everest is that it has a finite height. Once a climber reaches the summit, there is nowhere else for them to go but down. The problem with this absolute fact is that, statistically, going down is the most difficult part about climbing the world’s highest mountain. In fact, one in four people who reach the summit die during the descent. Summit fever has claimed their souls, forcing them to give every last bit of energy to reach the top, unaware – or oblivious – to the fact they also need to save some energy for the way down. Unfortunately, ignorance is bliss.
This metaphor can be aptly used for the rise and fall of Chimera Energy. The company began the trek on July 10, 2012, fully equipped and ready for the challenges ahead. As it progressed up the mountain – as its stock began to rise and as the public took interest in the company – Chimera became encouraged. It began to believe in its ability to reach the top of the mountain, and so it kept climbing – and its stock kept rising. Eventually, it reached the summit and enjoyed the moment. On August 10, 2012, Chimera Energy reached a staggering high of $1.84, an impressive feat for one of the notably smaller energy companies.
Also on August 10, 2012, Chimera Energy made an announcement. It announced that company management was scheduled to directly meet with PEMEX associates in Mexico City. The meeting intended to bring about a collaboration for utilizing Chimera Energy’s extraction method throughout Latin America.
What happens when a climber reaches the top of Mount Everest and, blind to the bliss he or she is feeling because of their accomplishment, stays too long? At close to 30,000 feet, the altitude is so thin that merely sitting and breathing consumes energy. If a climber stays too long, they are making the descent even riskier. The same could be said about Chimera Energy. It reached the glorious high of August 10, 2012, and wanted to climb higher.
Ambition is a good thing up to a point. Sometimes it is just as courageous to know when to climb down as it is to have the strength to climb up.