Cape Town - The share price of JSE-listed Aspen Pharmacare Holdings [JSE:APN] appears to have recovered after a rocky start on Tuesday, caused by rumours that research group Viceroy was investigating the pharmaceutical company.
Aspen's share price opened at R261.01 a share on Tuesday, and reached an intraday low of R234.98 at 13:00 before it started to recover.
By 16:40 it was trading at R250.81, down 4.3% on the day.
In an afternoon notice to shareholders, the pharmaceutical company said it was aware of speculation that it was being investigated by Viceroy.
“Aspen shareholders are advised that it has had no contact with Viceroy Research and, as such, is unable to confirm that this speculation is correct,” it said.
Viceroy research had released an exposé on Stellenbosch-headquartered global retailer Steinhoff in December. It did not immediately reply to a Fin24 request for comment.
Aspen also indicated that it was not aware of “price sensitive” information that required communication to shareholders.
“Trading in the current financial year has been consistent with the prospects communicated to shareholders in the 2017 financial year results announcement as published on SENS on 14 September 2017,” the notice read.
Earlier, the deputy chair of Sasfin Securities David Shapiro had tweeted that investors were "perplexed" by the share's fall.
Aspen in free fall. Now at R240. Down 8% on the day. Digging for information but everyone as perplexed as I am. That doesn’t mean there isn’t a story. Steinhoff also losing altitude again. At 710 it’s off 18%. TG for resources. Seems to be only stable underpin at the moment.— David Shapiro (@davidshapiro61) January 9, 2018
Shapiro told Fin24 by phone on Tuesday afternoon that a drop in the share price without any reasonable information was worrying, especially as the pace of the fall appeared to be “aggressive”.
“We see a sell-off and we can’t make head or tail of it,” he said.
There was similarly a sell-off from halfway through November, which saw the share price come down from over R300 to approach R240, he noted. Essentially the share price has fallen to levels it was two years ago, he explained.
He also indicated that investors were sensitive in light of the fallout from Steinhoff.
Aspen advises that the group has had no contact with Viceroy Research nor is it aware of price sensitive information that requires communication to shareholders. Shares have recovered marginally. R247. Issue doesn’t explain weakness that started back in Nov. Still a mystery.— David Shapiro (@davidshapiro61) January 9, 2018
Last year Aspen faced probes by the Competition Commission over the excessive pricing of cancer medication. The investigation was dropped. Shapiro said that these probes were not enough to warrant the loss in share value as has been observed.
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