Monday, June 01, 2020
Could Have Done Better
BOUSTEAD/LTAT - As the main shareholder, LTAT should be careful about what it says in public. LTAT said it was considering a proposal to privatise the company, subject to finalisation of structure, funding and regulatory approvals. IF all major shareholders CAN do this at will, it will cause chaos in the said stocks. Just by saying "considering", one can "push" one's stock without retribution.
This forced Boustead to come out with another statement that this does not indicate a firm proposal, nor does it indicate LTAT will definitely go through with proposal. Just got to wary here, non-censure or no-reprimand will mean it is OK for major shareholders to say certain things before fruition. It is so easy to NOT go ahead with the said proposal,... no funding la, cannot agree on proper structure.
SC and Bursa have to be careful NOT to set a precedent here. You cannot reprimand one and not the other.
There has to be line drawn between revealing substantive information of relevance and "not time yet to reveal till most critical details have firmed up". Not tackling this may give rise to unnecessary speculation and a volatile price movement which can only benefit the ones "in the know". What was most unnecessary was to put out an actual price of 80 sen as a possible offer. Why was that even necessary?
Maybe no one benefitted from this, and LTAT acted in the best interest of shareholders. Still, it leaves a sour taste and certainly not the best example of releasing proper important information to the investing public.
The shares of Boustead never did even reach 80 sen after the news. But there was heavy volume traded. What was more significant was the huge jump in volume on 22 May and 27 May, from 48 sen to 61.5 sen prior to the news flow.
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