This article has been updated.
- On Tuesday, AYO Technology Solutions' share price opened at R3.50, before slumping to just 3 cents.
- A single trade of 100 shares triggered the collapse, and the company says it is investigating the transaction.
- Before the end of trading, two deals pushed the share price back to R3.50.
Shares in the Iqbal Survé-linked IT group AYO Technology Solutions tanked as much as 99% during trading on Tuesday.
Shares started the day at R3.50 before it slumped to 3c within minutes of the market opening, following a single trade of 100 shares. This left the company valued at only R10.3 million.
AYO spokesperson Kaz Henderson said the company was "aware of a transaction that took place and is investigating this with the JSE".
According to market analyst Anthony Clark of Small Talk Daily Research, the slump indicates that the market has no interest in the company's stock.
He said the bid-offer spread – the difference between the price at which you can buy a share and the price at which you can sell it – shows how unpopular AYO is.
"The fact that the bid-offer is at 11 cents to R3.43 indicates explicitly that the market has no interest in buying the stock".
Clark speculated earlier on Tuesday that it was likely that the company would come to the market to make sure that the price does not close down 99%.
"It generally happens that way. Whenever the share price of any company associated with Iqbal Survé falls very sharply, they seem to have a miraculous run towards the end of the day, so as not to look too damaging in terms of the mark-to-market valuations." This refers to an accounting method used to measure the value of assets based on market prices.
Just after 16:00, the share jumped back to R3.50 following two deals of around 2 400 shares.
This brought the company’s market capitalisation back to around R1.2 billion – still a far cry from the R14.7 billion market cap it commanded when it listed on the JSE in December 2017.
At the time, the Public Investment Corporation invested R4.3 billion in the business, an information technology company in Survé's Sekunjalo stable. The PIC paid R43 a share for a 29% stake in the company.
The PIC has since instituted a court case against AYO to compel it to return the full investment plus interest. AYO is opposing the matter.
Apart from a calamitous collapse in its share price, its JSE listing has been marred in other ways. Two years ago, the JSE fined it R6.5 million for the publication of a number of material errors in its 2018 interim results, and it later disqualified two former board members of the IT group from acting as directors of listed companies for five years due to these errors.
On Thursday, the JSE confirmed to Fin24 that it did not appear as if there was market manipulation in breach of Section 80 of the Financial Markets Act.
The article has been updated with the result of the JSE's findings with regards to market manipulation. The Financial Sector Conduct Authority (FSCA) has also registered an investigation into possible price manipulation, and the article will be updated with its findings once released.