NZX probes company’s market disclosures
NZX Regulation continues to investigate disclosure obligations of Blackwell Global Holdings (BGI) over the past month, including the information released in the company’s results announcement on June
25.
BGI, a financial services company, was placed in a trading halt just after 4pm on Thursday after the company admitted it misquoted its net tangible assets per share as being $0.15, later amending the amount to $0.0015.
The error meant Blackwell told shareholders it owned about $75.3 million in assets, compared to the roughly $750,000 in assets it actually had.
At the time of the June 25 announcement, BGI traded at 1.7c, but had since risen to 9.1c — a 12-month gain of 2126.4 per cent, which increased the company’s market capitalisation from $2m to $45.7m.
The gain came despite the company reporting a net loss of $693,000 after tax, and revenue of just $436,000.
Various directors and senior management had sold shares during the latest rally, and one director sold
5,861,000 shares — more than 1 per cent of the microcap company, broking house Jarden noted.
Some market commentators believe the stock has been driven purely by casual investors enticed by its gains, given its consistent appearance on the NZX top gainers’ board and commentary on the Sharesies share trading chat forum.
After coming out of a trading halt, the stock last traded at 4.3c, down
5.1c or 56 per cent from Thursday’s close. The NZX sent two inquiries to BGI — one on June 22 and the other on Wednesday this week — about the big moves in its share price. In both cases, BGI chairman Sean Joyce said the company’s directors were not aware of any material information that should be released to the markets.