NZX probes Rakon share price spike
Mystery surrounds 42.5% rise in share price.
Stock exchange operator NZX has requested a 'please explain' from Rakon over a 40%-plus spike in its share price in under a month.
Between January 4 and January 27, Rakon's share price [NZX:RAK] rose from 47c to 67c, an increase of 20c or 42.5%.
"Given this large increase in the price of Rakon, please advise NZX whether Rakon Limited continues to comply with Listing Rule 10.1.1. [continuous disclosure]," NZX asked.
In a one sentence reply, Rakon's chief financial officer Graham Leaming says the company is compliant with NZX continuous disclosure rules.
Rakon has made only one NZX disclosure during the period NZX is questioning - a substantial shareholder notice on January 5 reporting that AMP Capital Investors has reduced its stake to 7.447% from a previously held 8.510%. That is not likely to have affected the share price. The company posted its half year report to shareholders in the week before Christmas and while it contained a mildly positive outlook, these documents do not normally drive large share price movements as they are mainly historic.
A year ago, Rakon's share price was at $1.25 and it has declined steadily since then.
A market commentator spoken to by NBR said "one or two people are probably just thinking that at these levels it's an interesting buy."
Rakon chairman Bryan Mogridge was the MC at a lunch in Auckland last week (where the PM also spoke) and he told the audience about the low wages the company is able to pay because it manufactures in China - 2 euro an hour compared to 20 euro an hour it pays to manufacture in Europe.
"If you think you've got lower costs coming then why not have a go at buying the shares," one attendee told NBR, as another explanation for the share price rise.
NBR staff
Mon, 30 Jan 2012
Mon, 30 Jan 2012
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NZX probes Rakon share price spike
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