Also I have read a bit of the posts in Value Buddies pertaining to the AGM held on 26 oct 2015 (click here).
A bit on the history of the past Silverlake Axis stock price plunges:
- The article titled “Foreword & Introduction: The Daredevil’s Case Guide to Detect Accounting Fraud in Asia” published on 27 April 2015, had used Silverlake Axis, along with a number of other Singapore- and Hongkong-listed companies, as case studies about possible fraudulent activity in the Asian stock market. Silverlake Axis had issued a statement on 20 May 2015 and claimed that the accusations levelled against it by the blogger was “completely unfounded and baseless.” The software firm also stated that it “strongly reject[s] the allegations” and that it’s seeking legal advice in relation to the matter. Consequently, Silverlake Axis’s shares have fallen by nearly 30% over the next two months.
- The stock price was hit again by a report from razor99 on 20 Aug 2015 (read here), and shortly after on 21 Aug 2015, the company requested for a trading halt, the market tanked sharply on Mon 24 Aug 2015 (the market was nevertheless, in a downtrend prior to all these). After the trading halt was lifted on 26 Aug 2015, the stock price dropped further to 0.43.
The stock price of Silverlake Axis was 0.84 on 20 Aug 2015. It reached 0.55 on 26 Aug 2015. A 34.5% decline. The price on 12 Nov 2015 was 0.665, but that is still a 21% decline from the stock price on 20 Aug 2015.
Other stocks which were similarly affected by negative reports from short sellers or bloggers include Noble (read here and here), Olam (read here) and Sino Grandness (read here). Frankly, except for Olam none of these companies shares managed to crawl back to the share price level prior to the attack. Then again, unlike the others, Olam has the help of Temasek (read here).
In the case of Silverlake Axis, till today there is still no definite resolution after the attacks from razor99. Unfortunately in the stock market, lightning does strike more than once. There is nothing stopping another short seller or blogger from posting another negative report, making the situations worse or murkier.
As highlighted in the Value Buddies posts, during the AGM, Silverlake Axis Chairman kept highlighting that he need to spend lots of time to explain details ….
Silverlake Axis Ltd – Why did it ignore investor concerns over transactions with related parties for so long? (read here)
In the article, it mentioned:
Soon after the Group released its FY15 results on August 24, it also published its clarification about the allegations.
It said that the “adverse allegations contained in the Report are clearly baseless and without merit”.
It is seeking “legal advice and wishes to highlight that it views this matter most seriously and will be strenuously investigating the source of the Report with a view to taking all such action as may be necessary to fully protect and defend its interests.”
The statement went on to say that the Board believed that its results speak for themselves and it also confirmed that it had no undisclosed contingent liabilities.
With reference to the above actions / statements, and what I have read – till today, there is still no definite rebuttal or clarifications to razor99’s report.
Perhaps Silverlake Axis does have strong ‘financial fundamentals’. However, Silverlake Axis’ business is completely beyond my circle of competence, and there is nothing much I can understand from reading the news. Hope one day, the details will be out.