Could be last tee for new Pinnacle Point
AFTER THE CORTEX debacle, Absa now holds 1 259m shares – that’s 28% of the issued shares – in the Pinnacle Point Group (JSE code PNG). The group came into existence after the rather struggling AccRoss, the developers of, inter alia, the Gardener Ross golf estate near Centurion and several undeveloped dreams, made an offer for the unlisted Pinnacle Point. AccRoss’s issued shares more than doubled after the reverse takeover but Wilf Robinson remained on as CEO.
There’s always been a lot of speculation in AccRoss’s shares on the Safex futures market. On occasion, the outstanding contracts were as much as 98% of the issued shares of the company. Though the percentage fell substantially after the takeover of Pinnacle the sins remained the same. Robinson himself was one of the players, with 200 000 contracts on 20m shares.
The share price of the new Pinnacle fared just as badly as that of the old AccRoss. Golf and golf estates are no longer all that popular. Since November last year, when the new group was formed, its price fell from 100c to 40c/share – and that was enough to knock out the players with single stock futures.
Even Robinson couldn’t keep up with all the margin payments and had to throw in the towel. But it was much worse than just a fall from 100c to 40c in its share price. The best offer Robinson could get for his 200 000 contracts was R13 each – in other words, only 13c per PNG share as against the market price of 40c/share.
Robinson’s pain may be an indication of what will happen with other ordinary Pinnacle shares. Admittedly, its price closed fairly firmly at 45c/share last week and there were in fact buyers for 100 000.
The first set of financial statements for the new PNG will probably tell that the group’s net tangible asset value is somewhere in the region of 20c/share – if investors are very lucky. Cash on the balance sheet will be very scarce.
Definitely not a buy-and-hold investment, even though Absa financial director Jacques Schindehutte is apparently excited about the new investment. Forget that: if you can get more than Robinson’s 13c/ share for your ordinary shares don’t shilly-shally – grab it.