Oct 13 (Lagos) - Shares of
OANDO Plc has declined from a 2023 high price of N 16 in mid-September to just above N 9 per unit in mid-October. That is a declined to 44% in under one month.
At the center of this price movement is a court case which will decide whether shares of the Company will be de-listed from the stock exchange or not. This court case is from 2021 and was filed by some minority shareholders against the Company. The Company has proposed an offer just above N 7 per unit to buy out the minority shareholders and take the Company private.
The problem is that not all minority shareholders supported that case and it is anybody's guess regarding what the outcome would be for minority shareholders of Oando. The Company has called its annual general meeting next month where it will formally receive its 2020 and 2021 audited financial results. The notice lists some special business regarding cancellation of unissued shares but makes no mention of any de-listing discussion. Perhaps that is for another meeting after the court case also in November.
The offer price of N 7 per unit would seem laughable considering that price levels at which Oando has raised funds in the past during its more than 30 year presence on the stock market and the fact that similar listed Companies have seen their stocks rise sharply at the exchange over the past 6 months such as
CONOIL &
MRS which have gone multiple folds this year.
At the same time, stock market investors in Nigeria have seen some strange things occur in the capital market. That would explain the 44% rout in the stock price even after the Company reported its 2020 and 2021 financial results that showed improvements across the business.
reporting for easykobo.com on Friday, October 13 2023 from Lagos, Nigeria
Disclaimer - This article is meant for information purposes only and not a recommendation to buy, sell or trade any stocks mentioned in the above article. This article is an opinion of the writer, not financial advice.