Shares of Conduity Capital PLC (LON: CCAP) crashed 59% despite its lack of significant announcements. The company released an announcement saying that it had received a notification from a warrant holder to exercise warrants over a total of 4.5 million shares.
The warrants’ exercise, which will see the warrant holder acquire 4.5 million shares at 1.5p each, could have triggered the massive drop in the company’s share price, but there could also be other reasons for the crash.
Conduity capital is a cash shell that was admitted to trading on the AIM on October 1, 2020, and is yet to make its first acquisition even as the 6-month deadline to do so approaches. The shares issued were worth £67,500, which does not warrant the halving of the company’s valuation.
If the firm does not make any acquisition within the six-month window, it would have to raise at least £6 million to be readmitted to trading on the AIM as an investing company. Investors are waiting to see what the company does in future.
Conduity Capital’s shares price has fallen from a high of 4.10p in mid-February to its current lows, which does not bode well for future share placements, which would most likely be at a discounted rate.
The next few days and weeks will be critical for the cash shell as its 6-month deadline approaches, and we’ll be monitoring the company to see whether it will act to ensure it remains listed on the AIM.
Conduity Capital share price.
Conduit Capital shares crashed 59.56% to trade at 0.93p after falling from Tuesday’s closing price of 2.3p.
Should you invest in Conduity Capital shares?
Conduity Capital shares are traded on the London stock exchange's AIM market (the alternative investment market), which is the submarket specifically for smaller companies. AIM stocks are attractive to investors as they have tax advantages and smaller companies have the potential to benefit from rapid growth. But are Conduity Capital shares the best buy? Our stock market analysts regularly review the market and share their picks for high growth companies
