The carnage in the Reconnaissance Energy Africa Ltd (OTCMKTS:RECAF) continued on Tuesday as investors continued to head for the exits. The Reconnaissance Energy stock declined by 9% yesterday amidst the selloff and took the losses for the past week to as much as 35%.
However, it is perhaps more important for investors to note that the company responded yesterday to a short seller report that had been prepared by Viceroy Research. The short seller report was primarily related to the drilling activities that are currently being conducted by Reconnaissance Energy in Namibia.
The company was pretty strong in its response to the report and called the latest report a continued of the misinformation campaigns from Viceroy Research. Reconnaissance Energy also stated that much of the information in the report contain false allegations and also betrays a lack of knowledge about the oil and gas exploration business.
Following that, Reconnaissance Energy provided a point by point rebuttal of some of the claims made in the short seller research report. However, the rebuttal did not seem to cut much ice with the investors and the stock continued to be in free fall. It remains to be seen if the stock can actually make a recovery this week or not.