Escrow Watch is Stockhead’s fortnightly recap of the small cap companies releasing shares that have been locked away in escrow.
Escrow refers to shares that are held by early investors or directors, who are restrained from selling them for a year or two.
The release of escrowed shares can have a big impact on a stock’s price. If the holders choose to take up their right to sell – the shares you own can fall.
This is particularly important in a time when markets are predominantly in a bearish mood. Now these shareholders have a chance to join in whereas previously they could only sit back and watch.
Over the next fortnight, eight companies are releasing shares. Although the total number is relatively small at 65 million, three companies are releasing share parcels worth more than 10 per cent of their market capitalisation.
| Code | Company | Date of Release | Shares | % of company |
|---|---|---|---|---|
| LIT | Lithium Australia | 12 March | 7,108,511 | 1.24% |
| SVY | Stavely Minerals | 13 March | 1,203,601 | 0.56% |
| LPE | Locality Planning Energy Holdings | 13 March | 16,000,000 | 31.90% |
| EM2 | Eagle Mountain Mining | 14 March | 17,494,226 | 18.92% |
| CYL | Catalyst Metals | 15 March | 8,680,000 | 10.53% |
| JAN | Janison Education | 16 March | 6,694,076 | 3.69% |
| OSX | Osteopore | 18 March | 5,439,213 | 5.37% |
| ATL | Apollo Tourism & Leisure | 26 March | 2,575,214 | 1.38% |
The biggest releasers
Eagle Mountain Mining (ASX:EM2) is releasing the most shares: 17.5 million worth nearly 19 per cent of the company. It is a copper-gold explorer focused on the copper-rich US state of Arizona.
Next on the list is Locality Planning Energy (ASX:LPE), which is letting a 16 million strong package of shares off the leash, which equates to about 30 per cent of the energy retailer.
While the company upped its half-yearly revenue by 50 per cent, it booked a $3.4m dollar loss due to an increase in employee costs and a change in fair value of hedging instruments.
Victoria-focused gold explorer Catalyst Metals (ASX:CYL) is releasing nearly 8.7 million shares, equal to about 10 per cent.
Also active in the Garden State is Stavely Minerals (ASX:SVY), but its release of shares from escrow is much smaller at 1.2 million.
Stavely hit 40 per cent copper in September last year leading to it quintupling in value over just a few weeks. It followed that hit up with an intercept grading 26.8 per cent copper last month.