JSE investigates sudden big drop in 1time’s share price

AN INVESTIGATION by the JSE on Friday showed that an order to sell low-cost airline 1time’s shares at market price at the end of last Thursday’s trading resulted in the sudden, unexpected drop in its share price.

The airline’s share price plummeted 86,76% in the closing minutes of Thursday’s trade, to close at 2c.

“A shareholder had been selling shares at 16c during the day, and at the end of the day instructed his broker to sell the remaining parcel at the market price,” 1time CEO Blacky Komani said.

“Unfortunately, the only buy order on the market at the time was at 2c and that is why the trade was done at that price.”

The JSE’S head of investor relations, Michelle Joubert, noted: “The JSE’S surveillance systems are able to trace trades in real time, and often as far as trader, rather than member, level.”

1Time is in the midst of a threeyear turnaround strategy to cut costs so it can return to profitability.

Last month, the Altx-listed group reported a headline loss of R135,6m for the year ended December, after a R46,3m profit the previous year.

“The major challenges facing the low-cost airline industry are rising costs, particularly fuel and airport charges,” the company said.

1Time’s woes are shared by competitor Comair, which reported its first loss in 66 years in February when it posted a loss of R33,7m in the six months to December.

On Friday, 1time said it was close to clinching a regional network deal as part of its expansion plans.

“These routes are less competitive and therefore more profitable,” Mr Komani told Business Day.

1Time has been flying regional routes for some time and serves Zambia and Zanzibar. The company is also in talks to refinance its aircraft leases in local currency and plans to gradually introduce more fuelefficient aircraft.

1Time’s share price started the year at 23c, reaching its high for 2012 on January 4 at 26c. It has since been on a downward trend.

Reacting to Thursday’s share movement, market commentators were fairly vocal.

“It’s very possible for someone to put the wrong prices in when they’re putting in an order. This type of movement always needs to be questioned. It could have been an error, it could have been manipulation, it could have even been insider trading, which is obviously illegal,” said an equities dealer who declined to be named.