As Usual, Do you trust the IPO Authorities?

Making Your Life miserable

This is one more perspective on why Astro shares dived.

Astro Malaysia Holdings Bhd, whose share price has come under selling pressure over the past two days, saw a block of 250,000 shares crossed sharply higher than the market price on Tuesday today 23 October).

Stock market data showed the shares were transacted at RM3.05, which was 28 sen or 10.1% above Monday's closing price of RM2.77.

At midday, the pay-TV operator's share was down four sen to RM2.73. There were 47.78 million shares done.

However, the share price has fallen below the offer price over the past two day on perceived high valuations.

Star Biz reported on Tuesday Astro's sell-down could have been driven by cornerstone investors dumping shares as they were not subjected to any lock-up period.

The report quoted Aberdeen Asset Management Sdn Bhd managing director Gerald Ambrose as saying the rules for the major pay-TV operator's listing had been somewhat "perverted", allowing cornerstone investors to cash out earlier than the usual moratorium period of a few months.

"The rules have been tweaked (for this IPO). The cornerstone investors were allowed to dispose of their shares unlike in the IHH Healthcare and Gas Malaysia listings," he said.

Ambrose believed the issue of Astro not setting aside shares for retail investors as well as the high price could dampen market interest.

I am dumb-struck by Ambrose's comments.

Why should cornerstone investors sell at a loss?

Why buy the shares in the first place if you think the valuation are too rich?

Poor Amanah Saham unitholders as PNB has taken a loss of 10% now and so has the Universities Superannuation Fund!

Or were they the ones who sold at a minimalist profit to a third party to hold the "hot-brick"?

I smell a rat.

Bad, bad irresponsible authorities, whoever you may be......