Wednesday, October 10, 2012

Amedia- another sharp drop!

In March, Amedia dropped 19% in one day and we haven't learned why that happened (here). After a 4 months sideway movement, the stock broke above the March high of RM0.45 and rallied all the way to RM1.15 on September 27. On October 3, it broke below the RM1.00 mark and the return trip began.

Despite the announcement of a generous Bonus Issue of shares of 1-for-1 plus an equally generous Bonus Issue of warrants of 1-for-1 on October 5, the stock continued to decline. In just 7 days, the stock lost 63% of its value. Bursa has issued a Unusual Market Activity (UMA) query to the company today. I would not expect much from the query.

From the chart, the stock is now testing the horizontal line at RM0.43. If this is violated, it would probably test the next horizontal line at RM0.33. The financial results, if they are accurate, show a company that is doing reasonably well. The only thing one can say about the account is that there have been a number of amendments to both the quarterly results as well as the annual reports (both FY2011 & FY2010). It will be interesting to learn what's caused a drop of such magnitude.

A stock, with a generous capital exercise, a planned transfer from ACE Board to Main Board and seemingly good financial performance (albeit messy accounting record-keeping), that drops with fierce intensity for days on end, is a stock to be avoided. (Note: Amedia closed at RM0.42).


Chart: Amedia's daily chart as at Oct 10, 2012_4.15pm (Source: Quickcharts)

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, Amedia.

1 comment:

sky said...

Incidently Dato’ Wong Shee Kai @ Ricky, the CEO and founder of Asia Media was also (Independent Non-Executive Director) (Resigned on 16.08.2011) of Cybert (the stock tumpled form Rm2 to Rm0.2). Not an coincident.