“SHARKS” and “syndicates” are two dreaded words in an investor’s dictionary. These two ‘subversive’ elements are known to have been leading causes of investors – or more accurately stock punters – getting their fingers burned or lose their pants.
Doubtlessly, the two words have become chief concerns to whoever holding Dataprep Holdings Bhd’s stock at this very moment.
This could give rise to the notion that a pump and dump exercise could have triggered the company’s recent price hike, hence a prelude to a second unusual market activity (UMA) query.
To re-cap, Dataprep was first issued with a maiden UMA query on March 2 after its share price skyrocketed over 760% from a low of 16.5 sen on the eve of Chinese New Year (Jan 11) to RM1.42 on March 2 – all within a span of a fortnight!
Ironically, the UMA query failed to quell interest in the stock as its price continued to spike. This left the market regulator with no better option than to resort to serve ‘a red card’ on the counter on March 10 via the issuance of an advice urging investors to exercise caution and make informed decisions in the trading of Dataprep shares.
Fast forward to current times, the counter shot up 57 sen or 28.5% yesterday (April 21) to close at RM2.57 following a price resurrection since falling to a low of 72.5 sen on April 13.
Thus far today, the stock has demonstrated intense volatility, having drifted between an intraday low of RM2.05 and an intraday high of RM2.85 – whopping range of 80 sen in between.
Aside from the intense price volatility, another potential second UMA trigger is that the information technology service provider has appreciated almost 255% in a span of eight days between April 13 and 21.
To make matters worse, the company does not possess solid justification to substantiate its price surge.
On the contrary, it announced a private placement exercise yesterday (April 21) which entailed the price-fixing of its first tranche of proposed private placement at RM1.31 per placement share.
Not only that the RM1.31 price tag is 96% below its yesterday’s closing price of RM2.57 but this would certainly trigger concerns over dilution of share ownership incurred by the existing shareholders. This is because new shares are issued while the holdings of the existing shareholders remain the same.
Another worrisome development could be Dataprep’s employees share option scheme (ESOS) exercise on March 19 and April 16 totalling 4.58 million and 531,500 shares respectively at an issue price of 17 sen/share.
For the record, Dataprep was last traded at RM2.50 on March 19 (plunged 81 sen or 24.5% from the previous day) and RM1.54 (rose 35 sen or 29.41% from the previous day) respectively.
At 12.15pm, the stock was down 15 sen or 5.84% – presumably on profit taking – to RM2.42 with 66.05 million shares traded which gave Dataprep a market capitalisation of RM1.49 bil.
