Off Subject2 May 2020 13:09
Hi Twix, A bit off subject I know, but I feel it's important this is brought to light for all of us to know where we stand. This is a situation that took place with Valirx yesterday. Would appreciate your thoughts or anybody's thoughts for that matter.
1st May 2020 - Valirx (VAL)
Valirx had recently gone through a complete restructuring of its financial situation, including a consolidation of x125 and a placing for £200,000, leaving the company with 12m shares in issue at 0.01p and only 2m shares floating. Since then, the price had risen from 3p within two weeks of trading to a maximum of 23p on the 1st May. It was apparent from previous trading days that the MM's had run out of shares and were finding it difficult to stem the flow of buying and were struggling to keep control of the price. Every deramping troll was thrown at the threads, I counted at least 12 on one site alone, and the five broker sites I was keeping tabs on at the time all began to give false price and trade information.
At 07:00 on the 1st May the company announced an agreement with a Japanese compony to pursue the posibility of a Joint Venture, sending the price up 71%.
At 13:34 the company issued an RNS stement to the fact that they "might" seek further funding and take out a placing. Not that they would, or are going to take out a placing. The price dropped nearly 100% and left investors totally puzzled as to why a company seeking to finance their company would deliberately damage it's potential financing position by saying they might take out a placing. So I posted the following -
15:52 - Florida LSE - thread
"GeordieShores - Fred1eboy - Two interesting views on why this BOD who are seeking finance, would scupper the price of their own company, in tern, lowering the 30 day average that might be required to establish a placing price. If a nomad instructed them to do this I would strongly suggest that the Nomad must have a significant bias in some shape or form because there is no logical reason to force such an announcement before a placing is required. On the other hand, the normal practice for a company to comment on a major price improvement is to comment if there is no apparent reason for the increase, where in this case there is in the form of an RNS JV. Which leaves us with pressure brought to bare by the MM's. If this is the case, the BOD certainly have trust issues. I was fortunate to get out with a tidy profit. Unfortunately, many have been caught out here, unnecessarily imv"
Reply from Newtrade - Email from Valirx (Kevin Alexander)
15:58 - Newtrade - LSE thread
"This is the reply I got from Val just now re the RNS
Sorry. It was done at AIM Team’s insistence - nothing to do with the company. We did not want to do it. I believe they were worried that shareholders were buying shares without knowing about the company’s financial state - even though that was public. Again sorry you are disappointed - we are too."
See next post -