AVACTA (AVCT) has seen its share price rise from 100p on May 13 to 200p and then decline to 140p. I feel sorry for those investors who bought at around 200p.
The sharp decline in the share price (20p on Tuesday and 20p on Wednesday) could be evidence that this deal has leaked.
Source: Interactive Investor
The £25m placing price is 120p, so the fact that the share price is staying stable today at 140p (at 09.48 as I write) suggests, in my opinion, there is an easy short term profit to be made here and so I have made a small opportunistic investment via my Primary Bid account.
This is the third offer I have subscribed to recently via Primary Bid and I must say that it is very easy to subscribe via their website and the subsequent mechanics are very straightforward.
Questions remain as to whether the stock was overhyped to get it to 200p and why the share price dropped so quickly. This looks like another one for the LSE and FCA to have a look at, if they wish to maintain the confidence of investors in these markets.
Cliff Weight, Director, ShareSoc