Since day one CNVRG shares have been on a free-fall touching a low of 13.20 from the IPO price of 16.8 as the market openly sells CNVRG.
Market players wondered who and what triggered the selling. Many experts said that the IPO was expensively priced. But if that triggered the selling, didn’t the IPO subscribers know that CNVRG was expensive when they subscribed? Are those subscribers foolish enough to buy CNVRG only to sell at the opening? Who among those subscribers planned to buy CNVRG only to sell at a lower price?
The leading broker that facilitated the CNVRG shares selling is Mandarin Securities Corp. Mandarin according to the Capital Markets Integrity Corporation is an institutional type broker. Its nominee may have come from Hong Kong or has a strong connection with Hong Kong. Mandarin’s clients may mostly be Hong Kong domiciled funds or investors. Among the cornerstone investors are funds from Hong Kong.
Those Hong Kong funds may have been liquidating their CNVRG shares and reinvesting the funds to the biggest-ever IPO, the mammoth ANT IPO. Those funds/investors may not be minding their losses on the CNVRG shares as the ANT shares may give them a much higher return.
Jack Ma’s Ant Group Co. is set to raise about $34.5 billion through initial public offerings in Shanghai and Hong Kong, a blockbuster listing that will rank as the biggest IPO ever and make it one of the most valuable finance firms on the planet.
It has been reported in Bloomberg that demand for ANT shares has been so high that ANT plans to stop taking investor orders for the Hong Kong leg a day earlier than scheduled as the share sale has already been heavily subscribed.
That may have triggered the seemingly frenetic selling of CNVRG shares from accounts at Mandarin. Hong Kong investors/funds may be selling fast CNVRG to catch ANT subscriptions. As CNVRG dropped, everyone followed the selling.
CNVRG may be a victim of bad timing.
On October 27, 2020 the PSEI index declined 1.17% to close at 6,415.08. On that day, the index touched 6,381.19 before bouncing back to 6,467.45 then settled at 6,415.08. There was a market selling in the stock exchange. Foreign funds and institutional investors may liquidate Philippine holdings to re-allocate the proceeds to ANT. The Philippine stock market may decline in the days leading to the ANT IPO as funds may liquidate holdings to reallocate to the ANT IPO. Everyone wants to take a piece of ANT.
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Disclaimer and Disclosure: This is an independent analysis for discussion purposes with the aim of giving stock traders and investors an independent viewpoint. Accuretti Systems Inc. in day to day trading may have owned, or is considering buying or disposing, the shares of the companies mentioned in this commentary.