- Jupiter Energy (JPR) shares have lost almost two-thirds of their value after the company spoke out about its irregular trading activity
- On April 21, the company closed the market at 0.4 cents per share. The next day, shares skyrocketed up 2650 per cent to 5.5 cents each
- The ASX paused trading until the company spoke to the big jump, saying it had no explanation for the huge takeup
- Trading then reopened on April 23, and Jupiter's share price was on the rise once more
- However, another share price spike forced the ASX to once again put the stock on hold
- After reviewing the events leading up to the huge trading days, Jupiter says the buzz around the company's share price on social media platforms could have fueled the activity
- An investigation uncovered 340 new holders had flocked to Jupiter stock over those two days — however, over half of the 12.5 million shares that traded hands were bought and sold within three days, indicating the surge was 'day trader' driven
- Despite the explanation, Jupiter has dropped 64.7 per cent on the market today, trading for 5.3 cents per share
Jupiter Energy (JPR) shares have lost almost two-thirds of their value after the company spoke out about its irregular trading activity.
A wild ride
On April 21, the company closed the market at 0.4 cents per share. The next day shares skyrocketed up 2650 per cent to 5.5 cents each.
Due to this the ASX paused trading and put in a price query about the sudden rise in shares. Jupiter replied to the query and stated it was not aware of any explanation for the recent trading.
The only sliver of a hint it gave was simply that it had kept the market "informed of operations in Kazakhstan on an ongoing basis". It then referred to its March 27 and April 14 announcements
Before trading on April 23, the company reported its quarterly report and cashflow report to ensure that the market had access to all available information before the shares traded again.
Jupiter believed these reports gave a balanced and sensible update on the state of operations in Kazakhstan and the impact of COVID-19.
Trading then opened and shares were on another significant rise. This led the ASX to issue another pause in trading, nearly two hours after the market opened.
The pause was not lifted for the remainder of the day, but during this time the company was in discussions with the ASX. Jupiter again confirmed it was not aware of any explanation in the recent trading activity.
Jupiter than requested a trading halt, which it wanted to be in place until April 28 or until the company could make an informed announcement to better explain this recent trading activity.
An executive trader
On April 23, one of Jupiter's sellers was Chairman and CEO, Geoff Gander, who sold his holding in his superannuation fund, which was 769,445 shares, and his trading account Vitoria P/L which has 41667 shares.
Geoff has had these shares for 10 years and was not in a "blackout" period or aware of any information concerning the company that was not already known.
A review of the significant movement reports for April 22 and April 23 has shown that the buying was not carried out by any particular investor that might have been perhaps building a strategic stake in the company by an on-market bid.
Instead, it appears that the buying was carried out by a number of investors. Jupiter said that approximately 250 investors purchased around 10,000 shares or less. Around 10 investors purchased between 100,000 and 300,000 shares and approximately 80 investors purchased between 10,000 and 100,000 shares.
The bottom line is that a staggering 340 new shareholders registered for Jupiter stock in those two days.
It is also important to note that the total number of shares settled over the two days was approximately six million shares against a total trading volume of approximately 12.5 million shares.
This indicates that 6.5 million shares were bought and sold within three business days, which is generally an indicator that this buying activity was 'day trader' driven.
What is the interest in Jupiter shares?
As it further investigated the uptake in stock, Jupiter pondered what had lead to the buzz in the first place.
The company looked on certain social media platforms and saw that Jupiter, amongst other companies, had attracted the interest of a number of share commentators.
The company believes that its share price increased as a result of recommendations in relation to Jupiter lodged via these social media platforms.
"The company made it clear on 22 April 2020 that it had no knowledge of any reason for the sharp price increase and by lodging its March 2020 quarterly and cashflow report before trading commenced on 23 April 2020," Jupiter said.
"The company tried to ensure any potential trader that had not taken the time to read recent announcements, had them in a summarised form to review prior to trading commencing on 23 April 2020," it added.
Despite the explanation, Jupiter has dropped 64.7 per cent on the market today, trading for 5.3 cents per share by close.