Director Trades: When you’re down the only way is up… right?
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When your stock crashes you have three options: run away (and wait to claim the tax loss), sit still and hope things get better or ‘top up’.
Speedcast’s (ASX: SDA) Peter Jackson bought $144,000 last week only a few weeks after it crashed.
Much of his stake was accumulated prior to its IPO in 2014 but he’s now bought on-market thrice since then. He bought 20,000 in 2016 at $3.10 and 33,700 in 2018 at $4.03 which cost nearly $200,000 all up.
Last month’s crash sent his total stake in the company down 38 per cent in a day. A few weeks on and he’s bought another $144,000 in shares. It’s all but certain he believes it will rise (or at least won’t) fall because there are plenty of other ways to spend that money.
As we covered in last week’s Director Trades column, sometimes gambles like this pay off and others they don’t. Time will tell.
But if your only problem is a share price decline (especially considering it still anticipates earnings of tens of millions of dollars) things could be worse.
The biggest buyer this week was Ryan Mount who bought $350,000 in Solomon-Islands focused nickel Axiom Mining (ASX: AVQ) and their problems are much bigger.
It has missed shipping targets due to inclement weather, has been suspended for nearly two months and extended a rights issue almost that long.
The purchase was actually done a month ago but only disclosed this week just as it announced the extension. That’s a show of confidence to shareholders if ever there was one.
While a company does not have to reveal whether it’s struggling in the midst of a capital raise, it is unlikely it would extend the deadline if it was going well.
Of course you can also buy to ensure the maximum amount of capital in a rights offer is raised. Three directors of Northern Minerals (ASX: NTU) put in $1.3 million between them, ensuring its rights issue raised $7 million – the maximum amount.
Aurora Minerals’ (ASX: ARM) Phillip Jackson bought $266,452. The base metals explorer has interests in multiple companies including Peninsula Mines (ASX: PSM) and Predictive Discovery (ASX: PDI). But it is currently looking for projects to invest in its own right.
David Baffsky, director of investment company Ariadne Australia (ASX: ARA), bought $126,949. 2019 has been a great year for global share markets and investment companies are benefiting just as much as individual investors.
Ariadne also invest in property, a market whose immediate future is less certain.
Finally, Bard1 Life Science (ASX: BD1) directors Max Johnston and Phillip Powell bought $100,000 each. This company is one of several trying to find a cure for cancer – specifically for Bard1 lung and ovarian cancer.
This company is still at the stage of seeking commercial partners. But as stocks like Orthocell (ASX: OCC) have shown us, share prices can go ballistic if your medicine or device works.
|BRI||Big River Industries||James Bindon||Buy||11 July||119,048||$125,000||Placement|
|BD1||Bard1 Life Sciences||Max Johnston||Buy||12 July||5,000,000||$100,000||Rights issue|
|BD1||Bard1 Life Sciences||Phillip Powell||Buy||12 July||5,000,000||$100,000||Rights issue|
|QV1||QV Equities||Anton Tagliaferro||Buy||15 July||300,000||$310,376||On market|
|AVQ||Axiom Mining||Ryan Mount||Buy||10 June||8,750,000||$350,000||Placement|
|ARA||Ariadne Australia||David Baffsky||Buy||18 June||182,713||$126,949||Off market|
|ARM||Aurora Minerals||Phillip Jackson||Buy||17 July||26,645,245||$266,452||Rights Issue|
|SDA||Speedcast||Peter Jackson||Buy||18 July||80,000||$144,000||On market|
|NTU||Northern Minerals||Yanchun Wang||Buy||15 July||11,202,364||$504,106.38||Rights issue|
|NTU||Northern Minerals||Xiaohua Liu||Buy||15 July||8,461,539||$380,769.25||Rights issue|
|NTU||Northern Minerals||Congyan Xue||Buy||15 July||10,000,001||$450,000||Rights issue|