SMART solution provider Metronic Global Bhd whose Warrant-B (2022/2025) skyrocketed as much as 558% after its listing on July 13 before plummeting to close at 2 sen yesterday (Aug 3) is now expecting its e-commerce division to rake in a turnover of RM100 mil over the next five years (presumably an average of RM20 mil a year).
Such challenge is levelled at its wholly owned subsidiary Metronic Integrated System Sdn Bhd (MISSB) which provides end-to-end engineering and maintenance solutions in the facilities management industry such as intelligent building management system, building management system, energy management system, security system and ICT systems.
“MISSB has ventured into Internet of Things (IoT), logistics technology and e-commerce due to the vast potential of its applications and the synergies with the group’s core which the group expected this software allow to generate total gross merchandise turnover of RM100 mil for the coming five years to the group,” Metronic Global pointed out in a media release.
“The group has invested millions of ringgit to develop the services mobile apps, logistic / supply chain management platform and e-commerce platform to enhance the operation and also ventured into new businesses.”
Investors must be wondering if this is merely a PR (public relation) exercise to pacify them or an act to restore the company’s reputation after its warrant’s debacle a.k.a. “bear trap for newbies” which has also incurred the wrath of the Minority Shareholders Watch Group (MSWG).
In its newsletter dated July 22 which was aptly entitled “A Rare Case of Warrant Price Runs Ahead of Its Mother Share”, the shareholder activism group has described the extreme volatility of Metronic Warrant-B as seemingly manipulative and speculative given there has been no substantial improvement in the company’s fundamentals.
“In all fairness, part of the share/warrant price surge could be due to speculators hoping to make a quick buck by attempting to ride on the upward momentum. While speculation is not illegal, the leveraging of manipulative manoeuvres, notably the ‘pump and dump’ scheme, is,” observed MSWG’s CEO Devanesan Evanson.
“In this regard, the regulators are surely in a better position to determine whether there was manipulation in the trading of Metronic Warrant-B as they have access to more data, investors and brokers, in addition to sophisticated surveillance systems.”
Coming on the back of former attorney-general Tan Sri Mohamed Apandi Ali quitting as its independent non-executive director (INED) on July 14, the Warrant-B is the fruit of Metronic Global’s recently completed rights issue exercise whereby shareholders were entitled to subscribe to six rights shares (at 6 sen per rights share) together with two free Warrant-B for every one existing share held.
The rights issue exercise was completed on July 13 with the listing and quotation of 1.3 billion rights shares and 433.19 million Warrant-B on Bursa Malaysia. The warrants have a conversion period of three years until July 5, 2025 and an exercise/conversion ratio of 1:1 with a strike price of 6 sen.
Particularly on July 14, the price of Metronic Warrant-B spiked to an intraday high of 39.5 sen before closing at 21.5 sen. At 21.5 sen, it represented an almost 140% premium over its mother share’s closing price of 9 sen.
However, the price of Warrant-B subsequently waned to end at a mere 2 sen as of yesterday (Aug 4) with 31.48 million warrants traded while the mother share ended down 2.5 sen or 25% to 7.5 sen with 220.92 million shares exchanged hands to give the company a market capitalisation of RM114 mil. – Aug 5, 2022
