Tag: Motley Fool

The Ampol Ltd (ASX: ALD) share price is treading slightly lower during afternoon trade on Thursday. This comes after the fuel retailer announced a potential issue of subordinated notes as well as a property transaction.

At the time of writing, Ampol shares are fetching $30.25 apiece, down 1.27%. For comparison, the S&P/ASX 200 Index (ASX: XJO) is relatively flat at 7,402, edging 0.04% higher.

Ampol commences bookbuild process

Investors are sending the Ampol share price lower following the company’s decision to offload some of its assets.

In its release, Ampol advised it has entered into an arrangement to sell 20 freehold convenience retail sites.

The non-binding heads of agreement will see the transfer of petrol stations to an unlisted property trust. Ampol will own a 51% interest, while Charter Hall will take up the remaining 49% stake.

The deal is expected to deliver Ampol around $48 million in net proceeds, subject to binding commitments.

Once the transaction is completed, Ampol plans to begin leasing the sites under long-term triple net lease arrangements.

In addition, the company confirmed it has commenced a bookbuild process to issue subordinated notes in the wholesale fixed income market.

It intends to use the funds acquired from the sales and notes issue to help fund the purchase of Z Energy Ltd (ASX: ZEL). Furthermore, any monies left over will be allocated to general corporate purposes.

The property transaction is expected to be finalised sometime in the first quarter of 2022.

Ampol share price snapshot

Over the past 12 months, the Ampol share price has fallen by around 3%. Year-to-date, its shares have traversed the other way, up 6% for the period.

Based on today’s price, Ampol commands a market capitalisation of roughly $7.19 billion, and has approximately 238.30 million shares outstanding.

The post Here’s why the Ampol (ASX:ALD) share price is struggling today appeared first on The Motley Fool Australia.

More reading

• 3 retail ASX shares to buy right now: experts
• Leading fund manager says these blue-chip ASX shares are buys right now
• ASX 200 (ASX:XJO) midday update: Incitec Pivot and Mesoblast jump, NAB drops
• Tritium is making news again, but do any ASX shares have exposure to EV charging stations?
• The top performing ASX 200 energy shares in October unmasked

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3r8HZni

Shares in Whitehaven Coal Ltd (ASX: WHC) are inching higher in afternoon trade today and now fetch $2.575 apiece.

It’s been a gut-wrenching period of volatility for Whitehaven shareholders these last 2 months. After cruising to a high of $3.59 in early October, it’s been nothing but downward-sloping returns for the Whitehaven share price ever since.

The selling pressure has now levelled off, but shares are hovering at 3-month lows. However, the team at Morgan Stanley says investors are letting one crucial factor go unnoticed.

Let’s take a closer look at the situation.

What’s up with Whitehaven lately?

There hasn’t been too much out of Whitehaven’s camp of late. Investors began selling Whitehaven in droves alongside a large drop in thermal coal pricing from early October.

In a period of 2 weeks, coal prices fell at a rapid pace from a 12-month high of US$269.50/tonne in October to US$140.90/tonne by November amid production curbs in China.

Given that Whitehaven is an ASX resource company that produces coal, it is considered a price taker. Its share price is therefore sensitive to fluctuations in the coal markets, as it can impact earnings.

Whitehaven’s share price fell 40% amid the sinking coal price from October to November, which also fell 48% in around the same time.

GC Newcastle coal futures have recovered slightly towards US$160/tonne as we approach December, which might have saved Whitehaven’s share price somewhat.

What are investors missing?

Despite the pullback, analysts’ at Morgan Stanley reckon investors are overlooking a crucial factor in the coal giant’s investment case.

The firm notes that Whitehaven has benefitted in revenue and free cash flow from the rally in coal prices. This, the broker reckons, is helping Whitehaven reduce its debt at an accelerated pace. It notes that the miner is deleveraging its balance sheet at over 2x faster than it did during the last market upswing.

On valuation grounds, Morgan Stanley also notes Whitehaven is trading below its lowest forward multiple in 5-years, based on the broker’s FY22 earnings.

This disconnect in Whitehaven’s valuation and its rapidly declining debt figure is under-appreciated by the market and could be a positive catalyst, the broker says.

Despite the recent commitment of several nations to phase out coal power at the recent COP26 summit, Morgan Stanley thinks that Whitehaven’s share price is set to jump. It also thinks shareholders have some juicy dividends to look forward to from the company’s stronger balance sheet.

Whitehaven share price snapshot

Despite the recent headwinds, the Whitehaven share price is still up 66% in the past 12 months, after rallying another 57% this year to date.

In the past month, it has reversed course and lost 11%. However, investors appear to be catching the lows, and shares are now 5% in the green over this past week.

The post Morgan Stanley: don’t miss this with the Whitehaven (ASX:WHC) share price appeared first on The Motley Fool Australia.

More reading

• Why Webjet, Whispir, Whitehaven Coal, and Woodside shares are pushing higher
• ASX 200 coal shares unfazed by Johnson’s ‘death knell’ amid record prices
• Why BrainChip, HT&E, Platinum, and Whitehaven Coal are dropping
• Here’s why ASX 200 coal shares are in the spotlight today
• Why are ASX 200 resources shares booming again on Friday?

The author has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3xtMB8U

The market is bidding the Firefinch Ltd (ASX: FFX) share price lower after the company announced the completion of its heavily oversubscribed share purchase plan.

The company initially aimed to raise $25 million through the offering. However, it will instead accept all subscriptions ­– bringing in a total of approximately $51.36 million.

At the time of writing, the Firefinch share price is 64.2 cents, 8.94% lower than its previous close.

Let’s take a closer look at today’s news from the gold miner and lithium developer.

Firefinch share price tumbles on Thursday

Firefinch shareholders turned up in droves to take advantage of a share purchase plan offering Firefinch shares for 58 cents apiece.

The share purchase plan let existing shareholders bolster their portfolio by adding up to $30,000 worth of additional Firefinch shares without paying brokerage or transaction costs.

The 58-cent price tag represents a 17.7% discount on the Firefinch share price at yesterday’s close.

Though, when the capital raise was announced, it represented a 10.8% discount on the 5-day volume average weighted price.

According to the company’s managing director Dr Michael Anderson, approximately 40% of shareholders took up the opportunity.

“The demand reflects the strong outlook for the company and its terrific projects – Morila and Goulamina,” he said.

As a result, the company will issue more than 88.5 million new shares to subscribers tomorrow.

The funds raised will go towards ramp-up and development activities at the Morila Gold Project, the continuation of exploration, resource development, and expansion drilling at the Morila Super Pit, and the restart of drilling at the Goulamina Lithium Project. Any additional funds will become general working capital.

The Firefinch share price fell 6% the day the company announced the share purchase plan. However, it has gained 9% since then.

The company’s share price is also currently 240% higher than it was at the start of 2021.

The post Here’s why the Firefinch (ASX:FFX) share price is combusting today appeared first on The Motley Fool Australia.

More reading

• These 3 ASX 200 shares are topping the volume charts this Thursday
• Why Creso Pharma, Hansen, Life360, and Serko shares are falling
• Santos (ASX:STO) share price dips despite progress on $21 billion merger
• Here’s why the Nickel Mines (ASX:NIC) share price is soaring 15% so far this week
• Top brokers name 3 ASX shares to sell today

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3oXy9Ca

The S&P/ASX 200 Index (ASX: XJO) is having another bumpy day of returns so far this Thursday. At the time of writing, the ASX 200 is currently up by a modest 0.14% at 7,410 points after both dipping and rising over the trading day so far.

But rather than trying to decipher those machinations, let’s instead check out the ASX 200 shares that are currently topping the trading volume charts today, according to investing.com.

3 most active ASX 200 shares by volume on Thursday

Telstra Corporation Ltd (ASX: TLS)

ASX 200 telco Telstra is our first share worth checking out today. So far, Telstra has seen a chunky 13.88 million of its shares change hands. With no developments out of this telco so far, we can probably put this high volume down to the volatility we have seen with Telstra today.

The company is currently up by 0.12% at $4.08 a share (right below its new 52-week high of $4.09), but dipped as low as $4.04 earlier this morning. It’s this bouncing around that’s probably behind this elevated trading volume, perhaps in conjunction with the regular share buybacks the telco has been doing of late.

Pilbara Minerals Ltd (ASX: PLS)

From TLS to PLS! Pilbara Minerals is our next share up this Thursday. This ASX 200 lithium producer has seen a sizeable 14.2 million shares find a new home today. Again, this seems to just boil down to the actions of this company’s share price itself. Pilbara is currently up a healthy 2.57% at $3.60 a share after hitting a new all-time high of $2.62 this morning. This is the likely reason why we are seeing the company appear on this list.

EML Payments Ltd (ASX: EML)

ASX 200 payments company EML is our final and most traded share this Thursday, with a whopping 16.4 million shares bought and sold so far. We don’t have to look too far for a smoking gun here. This high volume is almost certainly due to the gigantic jump the EML share price has taken today.

EML shares are presently up a very pleasing 28.4% at $3.55 after the company got a green light from the Irish Central Bank to continue its operations after it previously flagged some concerns. No doubt there will be some very relieved investors out there!

The post These 3 ASX 200 shares are topping the volume charts this Thursday appeared first on The Motley Fool Australia.

More reading

• Why Adairs, EML, Fisher & Paykel Healthcare, and NRW are storming higher
• ASX 200 (ASX:XJO) midday update: EML rockets, NAB given ACCC green light
• EML (ASX:EML) share price rockets 17% on new programs green light from regulator
• These are the biggest opportunities on the ASX in 2022: fund manager
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Sebastian Bowen owns shares of Telstra Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended EML Payments. The Motley Fool Australia owns shares of and has recommended EML Payments and Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/2Zk8736

In late afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to end the day with a small gain. The benchmark index is currently up 0.1% to 7,405.1 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are falling:

Creso Pharma Ltd (ASX: CPH)

The Creso Pharma share price is down 4% to 9.6 cents. This morning the cannabis company revealed that it was served with a notice by ASIC requiring it to produce certain documents in connection with an investigation. This “includes suspected contraventions by the Company, its officers, agents, employees and representatives in relation to trading in its securities.”

Hansen Technologies Limited (ASX: HSN)

The Hansen share price is down 4% to $5.73. This follows the release of the billing technology company’s annual general meeting update. That update reveals that the company is on track for a marginal improvement in operating revenue in FY 2022 excluding the Telefonica contract.

Life360 Inc (ASX: 360)

The Life360 share price is down 9% to $12.30 following the completion of the institutional component of its fully underwritten A$280 million capital raising. Life360 raised the funds at $12.00 per new share, which represents an 11.1% discount to its last close price. These funds are to be used to acquire items tracking company Tile for a purchase price of up to US$205 million. Management notes that the combination of Life360 and Tile creates an integrated market leader in location solutions for all life stages. This enables a seamless experience for families that integrates people, pets and things.

Serko Ltd (ASX: SKO)

The Serko share price is down 11.5% to $6.56. This follows the completion of the travel booking technology company’s NZ$75 million placement. According to the release, the placement was fully subscribed at NZ$7.05 per share, representing a 10.2% discount to its last close price. These funds will be used to support the company’s growth. This includes its global marketplace strategy, which is aiming to transform Serko from an online booking tool into a distributed marketplace.

The post Why Creso Pharma, Hansen, Life360, and Serko shares are falling appeared first on The Motley Fool Australia.

More reading

• Creso Pharma (ASX:CPH) share price down 7% as chair stands aside amid ASIC probe
• Here’s why the Serko (ASX:SKO) share price is crashing 10% lower today
• Why the Life360 (ASX:360) share price is sinking 9% today
• Serko (ASX:SKO) share price halted amid H1 FY22 results and cap raise
• Top brokers name 3 ASX shares to buy today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Hansen Technologies, Life360, Inc., and Serko Ltd. The Motley Fool Australia has recommended Serko Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3FPFYkf

The Santos Ltd (ASX: STO) share price is struggling today. Shares in the S&P/ASX 200 Index (ASX: XJO) energy company are down 1% in afternoon trade to $6.82 per share.

This comes amid steady crude oil prices (Brent crude is at US$82.32 per barrel, up 10 US cents overnight). And the Santos share price is slipping despite its mega-merger with fellow ASX 200 energy share Oil Search Ltd (ASX: OSH) edging another step closer.

Santos share price in red

Investors aren’t bidding up the Santos share price today despite news that the 4 major proxy advisers now recommend Oil Search shareholders vote in favour of the merger at the extraordinary shareholders meeting on 7 December.

According to the Australian Financial Review, “CGI Glass Lewis has joined Institutional Shareholder Services (ISS), Ownership Matters and the Australian Council of Superannuation Investors in advising Oil Search shareholders to back the deal…”

For the merger to go through on 10 December, as both the Santos and Oil Search boards hope, 75% of shareholders will need to back the deal. The merger also faces a final hurdle from Papua New Guinea’s National Court, which is expected to make its final determination on 9 December.

What are the reservations about the merger?

As the Motley Fool reported on 11 November, independent expert Grant Samuel reached the conclusion that the merger “is in the best interests of Oil Search shareholders in the absence of a superior proposal”.

The Santos share price dropped 2% on the day.

The report, based on Samuel’s findings, did note the following reservation:

Oil Search shareholders should note that, in its report, the independent expert has made an assessment of the underlying value of each of Oil Search and Santos and, on the basis of its view of those relative underlying values, has suggested that Oil Search shareholders are contributing a greater proportion to the underlying value of the merged group than the 38.5% which they will receive under the terms of the merger.

The report went on to state that:

However, the independent expert also notes the strategic, commercial and funding benefits of the merger, and has ultimately concluded that Oil Search shareholders are likely to be better off if the merger proceeds than if it does not.

This same reservation is what led ISS to qualify its own positive recommendation. Noting there were no superior offers at hand, ISS said (quoted by the AFR):

The qualification is to highlight concerns that a key reason provided in the scheme booklet for voting against the transactions is that OSH shareholders may take the view that the merger ratio implied by the scheme consideration does not reflect the underlying value of the contribution of OSH to the merged group.

Santos share price snapshot

The Santos share price is up 6% in 2021, trailing the 11% year-to-date gains posted by the ASX 200 during this same period.

Over the past month, Santos shares have lost around 6%.

The post Santos (ASX:STO) share price dips despite progress on $21 billion merger appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
• Biden taps oil reserve. What could this mean for ASX oil shares?
• Here’s why the Oil Search (ASX:OSH) share price is slipping today
• Why is the Santos (ASX:STO) share price falling on Monday?
• 5 things to watch on the ASX 200 on Monday

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/2Zp95v8

This week so far has been a big one for Nickel Mines Ltd (ASX: NIC) and its share price.

The company’s stock has been gaining since it announced it had signed a memorandum of understanding with Shanghai Decent Investment Group on Monday. The agreement will see the pair creating a framework for their future collaborations.

At the time of writing, the Nickel Mines share price is $1.37, 4.18% higher than its previous close. It has also soared 15.2% so far this week.

For context, the S&P/ASX 200 Index (ASX: XJO) is currently up 0.1% today and 0.5% in the past week.

Let’s take a closer look at this week’s news from the nickel producer.

Nickel Mines share price soars on partnership news

The Nickel Mines share price is roaring upwards this week after it agreed to expand its partnership with Shanghai Decent over the coming years.

The understanding is multifaceted and will see Nickel Mines acquiring a 70% interest in Shanghai Decent’s Oracle Nickel Project.

The project comprises 4 next-generation rotary kiln electric furnace lines, currently under construction in the Indonesia Morowali Industrial Park.

The Oracle Nickel Project company will separately undertake the construction of a 380-megawatt captive power plant. The plant will support the project’s rotary kiln electric furnace lines and the Indonesia Morowali Industrial Park’s overall power requirements.

Nickel Mines will pay US$371 million for the acquisition. It will also provide US$154 million of construction funding through 3 shareholder loans.

The acquisition is subject to shareholder approval.

The companies will also establish a ‘future energy’ collaboration framework. The framework will optimise Nickel Mines’ operations’ transition to renewable energy.

The collaboration could see the companies both contributing to fund a solar power plant at the Indonesia Morowali Industrial Park, or a combined-cycle gas turbine power plant.

Finally, under the agreement, the companies will look into the feasibility of jointly developing and funding future high-pressure acid leach projects.

The projects could use Nickel Mines’ current and prospective resources across Indonesia to produce battery grade nickel for the electric vehicle market, further diversifying the company’s operations.

The post Here’s why the Nickel Mines (ASX:NIC) share price is soaring 15% so far this week appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX shares today
• These 3 ASX 200 shares are topping the volume charts on Monday
• ASX 200 (ASX:XJO) midday update: Lithium miners jump, Flight Centre tumbles
• These were the best performing ASX 200 shares last week
• Here are the top 10 ASX shares today

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3FJhAR8

On Wednesday, we looked at three ASX shares that brokers have given buy ratings to this week.

On the flip side, today we look at a few shares that have just been given sell ratings by brokers. Here’s why they are bearish on these ASX shares:

Charter Hall Retail REIT (ASX: CQR)

According to a note out of Morgan Stanley, its analysts have downgraded this REIT’s shares to an underweight rating with a $4.05 price target. The broker made the move on the belief that smaller Australian retail REITs with regional exposure could underperform in the next 12 to 18 months. This is based on the normalisation of trade post-COVID and the softening of regional migration growth as people return to urban areas. The Charter Hall Retail REIT share price is trading at $4.29 on Thursday.

Commonwealth Bank of Australia (ASX: CBA)

A note out of Citi reveals that its analysts have retained their sell rating and $94.50 price target on this banking giant’s shares. The broker believes CBA’s shares are fully value given slowing growth in mortgage lending and strong competition. Citi also believes the bank’s expenses will increase quicker than income and notes that its weak position in business banking means it will miss out on stronger trading conditions at that side of banking. The CBA share price is trading at $96.03 today.

TechnologyOne Ltd (ASX: TNE)

Analysts at Macquarie have downgraded this enterprise software company’s shares to an underperform rating but with an improved price target of $11.00. This follows the release of the company’s full year results. While the broker has increased its earnings estimates for the coming years, it isn’t enough for a more positive rating. Macquarie believes TechnologyOne’s shares are expensive in comparison to peers. The TechnologyOne share price is fetching $11.92 on Thursday.

The post Top brokers name 3 ASX shares to sell today appeared first on The Motley Fool Australia.

More reading

• Macquarie (ASX:MQG) is now a big four bank
• Why Bapcor, Mayne Pharma, Race Oncology, and TechnologyOne shares are sinking
• Why is the Technology One (ASX:TNE) share price tumbling 9% today?
• Is the TechnologyOne (ASX:TNE) share price a buy after its results?
• Is the CBA (ASX:CBA) share price premium relative to other big banks justified?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3r7Upfb

The Global Lithium Resources Ltd (ASX: GL1) share price is continuing to decline today. This comes amid the company announcing positive lithium assay results.

At the time of writing, the lithium explorer’s shares are swapping hands for 60 cents apiece, down 6.98%. This means that over the last two days, its shares have fallen by around 13%, almost erasing the 15% gains made on Tuesday.

Global Lithium points to significant extension opportunity

The Global Lithium share price is sinking today after accelerating in value by more than 40% in the past month alone.

In this morning’s release, Global Lithium announced it has received significant lithium assay results from its ongoing CY4Q Exploration Program at the Marble Bar Lithium Project (MBLP).

The site is located around 150 kilometres southeast of Port Hedland in the Pilbara Region of Western Australia. MBLP is situated close to major roads, with direct links into Port Hedland for shipping bulk commodities, including spodumene concentrate.

Global Lithium has a 100% controlling interest in MBLP.

The first 14 reverse circulation (RC) holes, totalling 1,770 metres of drilling, returned strong spodumene lithium results. This highlights multiple lithium intersections lay within MBLP and validates potentially developing the area and extending the Archer deposit.

The assay results included the following:

• 14 metres at 1.14% of lithium oxide (Li2O) and 44 parts per million (ppm) of tantalum pentoxide (Ta2O5) from 11 metres in drillhole MBRC0181;
• 8 metres at 0.97% Li2O and 53 ppm Ta2O5 from 51 metres in drillhole MBRC0182;
• 12 metres at 0.64% Li2O and 50ppm Ta2O5 from 54 metres in drillhole MBRC0177; and
• 4 metres at 1.55% Li2O and 70ppm Ta2O5 from 37 metres in drillhole MBRC0174.

The company noted the CY4Q RC drilling program has completed 74 holes for 7,995 metres to 23 November. The majority of samples that have been sent to the laboratory are yet to be assayed.

RC drilling is planned to run until early December, with the remaining assays expected in the first quarter of 2022.

What did management say?

Global Lithium managing director Jamie Wright commented:

Our drilling earlier in 2021 and our subsequent targeting all suggested that the Marble Bar Road reserve offered significant exploration potential. We have been excited by what we have been seeing in this area and these initial assays clearly demonstrate the growth potential of the MBLP.

Whilst only a small portion of assays have been received to date, the results we are seeing are very encouraging. The initial assay results, combined with the discovery of a new pegmatite zone within the road reserve so close to Archer, certainly highlights the underexplored nature of the MBLP.

Global Lithium share price summary

Despite falling the last two days, Global Lithium shares have surged around 200% since listing on the ASX in May.

Its shares reached an all-time high of 81 cents earlier this month, before treading lower in the last few weeks.

Global Lithium presides a market capitalisation of roughly $64.16 million and has more than 108.75 million shares on its books.

The post Here’s why the Global Lithium (ASX:GL1) share price is falling 7% today appeared first on The Motley Fool Australia.

More reading

• Global Lithium (ASX:GL1) share price explodes 34% higher on capital raising update
• Here’s why the Global Lithium (ASX:GL1) share price rocketed 15% before a trading halt

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3CRjy02

Shares in Creso Pharma Ltd (ASX: CPH) continue to take a battering today. At the time of writing, shares in the cannabinoid company are down 7% at 9.3 cents, having come off a 3-month high of 15 cents just 2 weeks earlier.

Investors are punishing Creso on the back of its chairman’s probe from ASIC. Today the company notes that on 22 November 2021, it was served with a notice by ASIC requiring it to produce certain documents in connection with an investigation.

Just a week earlier, when the scandal unfolded, Creso advised that it hadn’t been served any papers from ASIC at the time.

Let’s see what’s changed.

What’s Creso Pharma caught up in?

The watchdog’s notice “identified for the first time that ASIC’s investigation includes suspected contraventions by the Company, its officers, agents, employees and representatives in relation to trading in its securities”, Creso says.

Creso stresses that “it should not be construed as an indication by ASIC that a contravention of the law has occurred, nor should it be considered a reflection upon any person or entity”, as reported by ASIC itself.

The company became involved in ASIC’s investigation because of “common directorships” of its chairman Adam Blumenthal, who is also a director at EverBlu Capital.

Blumenthal has today stood aside from his role as chairman of Creso Pharma, to distance its “operations and governance from the ASIC investigation”.

Another executive director, Dr James Ellingford, will jump in as interim chairman of the company until a solution is arrived at. The board has also has established a standalone subcommittee to help assist with the investigation.

Investors continue driving in the pain following the announcement, with the selling pressure on Creso’s share price occurring at a volume of 90% of its 4-week trading volume.

What’s the impact going forward?

According to Creso, not much. It reckons it has taken the necessary steps to comply with the matter and has offered its assistance in the investigation.

Hence, it is business as usual for the cannabinoid player, according to the release. Commenting specifically on its impact, the company added:

Importantly, the existence of the ASIC investigation does not impact on Creso Pharma’s ability to continue to operate efficiently. The Company notes that its key business operations in Canada and Switzerland are each managed by in-country senior executives who have been quarantined from this matter and, as such, those operations remain unaffected and are operating as usual. The Company appreciates and is grateful for the continued support of all of its stakeholders.

Investors have been leaving the Creso Pharma party for the last 2 weeks since the news was announced. In the last week alone, shares have lost another 15%, and are now down 48% since January 1.

Despite the turbulence, Creso shares are still up 200% for the year.

The post Creso Pharma (ASX:CPH) share price down 7% as chair stands aside amid ASIC probe appeared first on The Motley Fool Australia.

More reading

• Why the Creso Pharma (ASX:CPH) share price is down 29% this week
• Creso Pharma (ASX:CPH) share price down 6% after speeding ticket
• Why the Creso Pharma (ASX:CPH) share price fell 9% before freezing
• Creso Pharma (ASX:CPH) share price climbs on increasing revenue update
• These were the best performing ASX cannabis shares in October

The author has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3FMYREa