AEM (7146, Industrial Product) – a beautiful misunderstood story that drives it up from 0.44 on Jan 13, 2010 to 1.29 on Jan 15, 2010.
Fundamentally speaking, the stock is probably does not worth 1.29. However, the investors thought that it will go up so they are willing to pay more to catch it, finally, it has to come down.
This stock flied so fast and you cann’t even catch it unless you buy at the high. I discover the stock at around 0.44 and thought that the fundamental is not attractive and I thought the most it can go is 0.51. It went up many times more. Amazing. I have been able to spot some potential stock before it became the hot tips of the market.
On Jan 13, 2010, it suddenly shot up from 0.44 to limit up price at 0.75.
On the same day at 6:21 pm, the company, in replying to the query from Bursa Malaysia, came out with the following statement saying that it is not aware of any other activities that may have contributed to the Unusual Market Activity(UMA):
1. The corporate development relating to the Group business and affairs that has been previously announced that may account for the unusual market activities are:
(a) The Company has appointed MIMB Investment Bank Bhd as our Placement Agent to place out 10% of our share capital. Furthermore, the Company has successfully identified a place for the 10% over the last closing price.
(b) The Company has negotiated with an interested party to provide funding for up to RM 15 million for a term of 2 years at an interest rate of 6 % per annum subject to the funder having a right to convert debts or any part thereof to equity at conversion price of RM 0.55 representing a premium of more than 20% of current closing price. This arrangement is subject to the obtaining of shareholders and regulators approval wherever required.
2. AEM is not aware of any rumour or report concerning the business and affair of the Company that may account for the unusual market activity.
3. AEM is not aware of any other possible explanation to account for the unusual market activity; and
4. AEM is not aware of an material information that requires immediate disclosure in accordance with Paragraph 9.03 of Bursa Securities LR.
On the same day at 6:39 pm, it issued another lengthy statement as follows:
The Board of Directors of the Company wishes to inform that due to the change in the dynamics in the Printed Circuit Boards industry, the Company has decided to embark on an exercise to upgrade, improve its current production capabilities and explore new viable businesses to improve the Company’s performance.
Due to the recent financial crisis, Malaysian operations has been operating at below 60% capacity for the past 2 years and the Company has been looking unsuccessfully for the past 2 years for fresh funds in order to upgrade our production lines so as to compete for more businesses.
In order to address the concerns of the Company’s Bankers, the Company has retained their Corporate Advisors the prominent law firm of Omar Ismail Hazman & Co to assist us in restructuring and transforming the operations of the Company.
The mandate given to the Corporate Advisors of the Company includes negotiation with the Company’s bankers to restructure the Company existing facilities and for additional working capital facilities as well as sourcing for new investors to inject fresh capital into the Company. The Company’s corporate Advisors have also been given the mandate to look for good and viable investments to provide additional income to the Company.
In capitalising the recent increase in our share price, we have also appointed MIMB Investment Bank Bhd as our Placement Agent to place out 10% of our share capital.
In the past 6 months the Directors had been approached by many parties with investments proposals but on review found that the terms were onerous and will not benefit the Company nor the shareholders of the Company and were accordingly rejected by the Directors.
The company is now pleased to announce that the corporate advisors have now advised:
1. that the Company has successfully identified a placee for the 10% private placement at RM0.50 representing a premium of more than 10% over the last closing price.
2. that the Company has negotiated with an interested party to provide funding for up to RM15million for a term of 2 years at an interest rate of 6% per annum subject to the funder having a right to convert debts or any part thereof to equity at conversion price of RM0.55 representing a premium of more than 20% of current closing price. This arrangement is subject to the obtaining of shareholders’ and regulators’ approval wherever required.
On Jan 14, 2010, AEM continued to fly from 0.88 to 1.06.
On the same evening at 6:23 pm, it came out with another statement saying that it is proposing private placement of 8.4495 million new ordinary shares of 0.50 each AEM, representing not more than ten percent of the existing issued and paid-up share capital of AEM.
On Jan 15, 2010, it continued to go on a upward trend from 1.19 to 1.29 but later make a u-turn to come down to as low as 0.90.
Will it ever rebound?
What do you think? I cannot provide all the answer, you have to think for yourself.