The largest escrow shareholders in Weebit have now sold down their entire stake in the company
There’s been some large trades on the share register of small cap tech player Weebit (ASX: WBT).
An ASX update this morning showed that the three largest escrowed shareholders have now exited their entire stake in the company.
Escrow refers to an enforced holding period for shares owned early investors or directors, which restrains them from selling for a specific time — usually a year or two.
The release of escrowed shares can have a big impact on stock price, because a sudden influx of stock onto the market can depress the shares you own.
The company announced this morning that 6.5 million shares changed hands in a trade sale to “sophisticated, long term shareholders of Weebit”.
Following the announcement, shares in Weebit rose by almost 20 per cent to 56 cents. In late-March, the company’s share price fell below 40 cents — down from a 2019 high of 82 cents in early January. They rose 23% this morning to midday:
Weebit is an Israeli-based manufacturer of semiconductors. The company says its 3D-NAND technology can replace the “flash” memory used in most computer chips.
The company joined the ASX in August 2016 via a backdoor listing.
In mid-March, Weebit announced that 10 million shares were set to be released from escrow on March 31. The total number of Weebit shares on the market is 63.6 million, down from well over 1 billion after the company carried out a 25-to-1 stock consolidation in February.
So the 6.5 million shares which traded hands amount to just over 10 per cent of the company.
A spokesperson for the company declined the name the escrow shareholders who sold their stake, but directed Stockhead to recent “Ceasing to be a substantial shareholder” notices issued by the company.
The company has released two such notices in 2019 — one on February 27 with reference to Dr Amiram Borenstein, and one on March 27 with reference to Mr Ariel Malik.
The escrow sellers in question have “gradually reduced their shareholdings over time as they turn their focus to other business interests. This is the last of their trades”, the spokesperson said.
The spokesperson also declined to comment on the names of the sophisticated buyers who purchased the stock.