For publicly listed companies, the duty to report potential merger or aquisition interest surrounding them is a double-edged sword.
In the case of Hong Kong-orientated brokerage KVB Kunlun (HKG:8077), which became the subject of interest for a potential purchaser this week after its share prics headed skyward by over 130% following a successful clawback in the third quarter of this year of losses experienced during the first half, the mere interest in acquisition has caused share prices to head in the downward direction.
At the Hong Kong Stock Exchange’s close of business today, KVB Kunlun’s stock had dropped by a further 4%, after a decline of 6% on Thursday, the day after the announcement was made.
Currently, stock is down by a substantial 30% compared with an intraday high of HK$1.67 on Wednesday.
Indeed, whilst news of potential acquisition affects share prices of firms in most business sectors, with this being no exception, KVB Kunlun’s stock value remains healthy following strong performance over the last few months, with shares remaining significantly higher in value than the HK$0.40 to HK$0.45 range that they have traded at for the majority of the year so far.
Chart courtesy of Google.