Trading Places: Which majors bet Megaport can climb out of its slump?
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Trading Places is Stockhead’s semi-regular, pretty damn fascinating recap of the latest red flag buying and selling of ASX small cap shares. It is here that the rubber really hits the road for fund managers, stakeholders, distant (and not-so-distant) relatives and other famous or infamous investors.
Specifically, Trading Places tracks substantial shareholder movements – namely when an individual’s trade in a company’s stock crosses the 5% threshold. These are usually directors, individual investors, institutional investors… or their distant (and not-so-distant) relatives.
Shareholders are required by basic human decency (and the law) to publicly declare via the exchange when their personal stake goes below or above 5%, and from there, every movement in their holdings while owning above 5%.
Here’s the form to get you started, if reading this makes you twitchy.
Smart cloud connectivity company Megaport (ASX:MP1) has been struggling of late and has seen its share price plummet ~42% in the past month to ~$8.20. The company reported a disappointing Q3 where revenue growth only increased by 5% to $28m.
Furthermore, founder and chairman Bevan Slattery offloaded 3 million shares in a trade via the UBS equities desk in March equating to ~$39 million. Slattery still has ~5% stake in Megaport and remains the largest individual investor of the company, which he founded in 2013 and listed on the ASX in 2015.
But some big institutional investors seem to have confidence in Megaport’s long term prospects for climbing out of its slump. Japanese investment conglomerate Mitsubishi UFJ Financial Group topped up its shares in Megaport from 9.84% to 11.28% on April 22.
The Commonwealth Bank and its related bodies corporate increased its substantial holdings from 5% to 6.30% on April 22.
Superannuation and Investments Holdco and its related bodies corporate increased its substantial holdings from 5.07% to 6.26% on April 22.
Gold Road Resources (ASX:GOR) increased its substantial holdings in Ed Eshuys’ gold exploration and investment vehicle DGO Gold (ASX:DGO) after a series of trades as part of its takeover offer. By April 29, Gold Road Resources and each of of its listed subsidiaries had a 16.79% stake in DGO Gold which is expected to keep increasing.
Gold Road Resources last month announced it will offer $308 million in its shares to take out DGO Gold. It’s a deal that gives the Gruyere gold mine owner an intriguing position in De Grey Mining’s (ASX:DEG) world class Hemi discovery.
DGO, whose board has recommended the GOR bid, holds a number of exploration tenements in the Pilbara, Yilgarn, Bryah and Stuart Shelf provinces, but the real prize is its 14.4% holding in De Grey.
DGO directors, who controlled ~16% of DGO before the bid, have backed the takeover, which is conditional to a minimum 80% acceptance, with all conditions to be waived within 6 business days after that mark is hit.
Brain focused health company Neuren Pharmaceuticals (ASX:NEU) saw Milford Asset Management increase its substantial holdings from 5.22% to ~6.24% on April 26.
Neuren recently announced its had achieved US FDA approval for the Phase 2 trial of NNZ-2591 in a rare condition called Pitt Hopkins syndrome (PTHS).
The company’s share price has risen around ~195% in the past year to ~$3.80.
Recruitment player Hiremii (ASX:HMI) saw investor Jason Alan Carroll increase his substantial holdings from 10.2% to 11.3% on April 28.
Hiremi listed on the ASX in 2021 and while its share price has fallen ~61% since, it’s up ~8% to ~5.4 cents in the past month.