By Nigel Somerville, the Deputy Sheriff of AIM | Thursday 13 July 2017
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
AIM-China play Grand Group (GIPO) may not be of the filthy forty for listing too late, but the share price has been telling you something, given the massive discount to cash on offer. I said on Monday that a statement was needed as the shares again collapsed. Today (at last) it has obliged.
At the current 8.625p mid the market capitalisation is just £2.9 million. Yet it’s assets – and there are no businesses for it is a AIM rule 15 cash shell – amounted to some £25 million at the end of April. Heck, another small slippage and we will be down to 10x share price for cash!
Now some people might think that just returning the cash under such circumstances might be a suitable way forward. After all, that would nail almost 10 times the share price.
But not Grand Group.
AIM rules mean that without a suitable implementation of investment policy by 30 September the shares will be suspended and six months later delisted if still no progress is made.
But Grand group insists that:
The Board has also today resolved to hold the Company's AGM in early August and will be posting notices of the AGM to shareholders shortly. At the AGM the Board intend to propose an enlarged investing policy for shareholder approval.
The Board are also considering a secondary listing on an alternative market, as an alternative option to continue to provide shareholders a market for their shares during any prolonged period of suspension
Now it may be that there is a deal is the offing which will be so magnificent that it all makes perfect sense.
Or it could not.
In the time it has taken for me to write this, the shares have fallen again – to 7p mid.
Get out - don't wait for the delisting.
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