Asiasons Capital, Blumont, LionGold – Who lost money?

So much had been written about these companies in major newspapers. I am not into penny stocks but $8 billion of market capitalisation wiped out because of recent crash in these three stocks made me sit up. For a sense of $8 billion, it is 8 thousand times of $1 million each. That is a lot of money lost.

I looked at their latest sets of full-year financial results and the following data were extracted.

 

  Asiasons Blumont LionGold
Net assets per share 17.3 cents 5.96 cents 32.2 cents
Earnings/(loss) per share 2.96 cents 1.93 cents (94) cents
12-month High price $2.83 $2.54 $1.755
25 Oct 2013 share price 18.9 cents 16.3 cents 25 cents

Based on net assets of these companies, the 12-month high share prices were extremely high in comparison. The last traded share prices were more in line with the net assets per share.

In terms of earnings, LionGold made losses in the last financial year. Even calculating Price-to-Earnings ratio is just mind-boggling: 95 times

and 131 times for Asiasons and Blumont respectively using 12-month high prices. The P/E ratio for STI was only 13 times.

So what went wrong with investors/traders of these shares in the run up to peak and then crashed spectacularly? Who are these investors who could not get out in time when these shares crashed and therefore holding on to greatly reduced share values? That is the $8 billion question. MAS and SGX could shed lights in months to come since they have started investigating the trading activities of these three stocks.

Copyright © 2013, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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