Almond trading a puzzler
Thousands of Almond Resorts Inc. shares have been traded in the first half of this year, leaving some market watchers baffled as to why investors would be buying into the hotel property which has been closed for more than a year.
However, president of the Barbados Association of Corporate Shareholders, Doug Skeete, said some shareholders might believe something “big” could be happening with the hotel in the not too distant future which would allow them to make significant returns on their investment.
According to information from the Barbados Stock Exchange (BSE), 21 580 Almond shares were traded in the first six months of this year.
The majority of these shares – 16 580 – were traded in the second quarter with 12 080 shares traded on July 17 at $0.32 less than two weeks after Government announced its intention to buy Almond Beach Village.
The share price moved from $0.50 cents at the end of December 2012 to $0.40 at the end of March 2013 and $0.36 at the end of June.
Chris Callender, portfolio manager of Barbados’ largest mutual fund manager Fortress Fund Managers, told BARBADOS BUSINESS AUTHORITY many investors were likely taking the opportunity to exit the company now.
“If you had to look at the accounts for the company you’d notice that at the end of the day you’re basically going to get zero, so I’d rather get 40 cents or 35 cents as opposed to walking away with nothing,” he said.
Callender was, however, uncertain about why some investors were buying the shares, calling the trades “aberrations”.
“I don’t think there is any thinking going on there. I just think it could’ve been a bit of negligence on the part of the brokers,” he said.
Although Skeete also expressed some surprise at the movement in shares, he said some investors might be confident that Almond would not “die a natural death” but rebound even under new ownership and a new brand.
He said people who bought the shares should have made inquiries and been aware of the position of the company.
“Even if they go to a broker, clearly the broker would say to them, ‘Are you aware that you’re buying shares in a company that is not currently doing business?’” he pointed out.
“There’s been a big push to do something for, to and with Almond to the extent that I would think that current shareholders would anticipate something will happen [and] it will happen reasonably soon,” he added.
Both officials made it clear that it was the board of directors of Almond Resort Inc.’s responsibility to notify shareholders of a possible sale of the company’s biggest asset and not the buyer.
Skeete added:” I don’t it’s the BSE’s role to comment on these developments. I think it is the role of . . . the parties to any agreement. So . . . it’s for Neal & Massy (the parent company) to keep their shareholders abreast of what is happening.”