Could be last tee for new Pin­na­cle Point

Finweek English Edition - - Openers - Jac­ques Schin­de­hütte

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.

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