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Broad Investments Asked To Explain Share Price |
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Written by Adam Gosling
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Thursday, 31 August 2006 |
The Australian Stock Exchange has asked IP Telephony providers
Broad Investments to explain a sudden fall in its share price and increased
trading volumes.
In a statement to the ASX, Broad Investments, owners of the Broad
IP VoIP network service operator says the Board of Broad is not sure why investors
are suddenly seeling the stock down.
It does suggest that the fact it has been in discussions to
raise additional working capital could have something to do with it.
Broad says it hopes to raise more capital from either a Convertible
Note Issue, A Pro Rata Rights Issues, a Share Purchase Plan or placement of
additional shares.
It is possible that information about such discussions has
reached the market which has encouraged some shareholders to speculate about
the future price of the securities," says the statement which suggests day
traders may be speculating on the
company's shares because it has such a low trading price.
The letter to the ASX also revealed that the Board is
looking at changing the company structure to distance the holding company, Broad
Investments, from the trading entities it owns by inserting a wholly owned
subsidiary between them.
Broad Investments owns and operates three trading entities.
MTX, Glovebox and BroadIP.
Another viable alternative the company puts up for the interest
in the companies flagging share price could be the release of a PowerPoint presentation
to the marker which says that achieving market share in the trading operations
is subject to sufficient funding becoming available to pay for marketing and to
fund the growth strategy.
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