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$1.71 spotless group holdings limited

Ann: Class action proceeding against Spotless, page-13

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bug1

6,633 Posts.

615

27/02/17

09:26

Post #: 22923071
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Originally posted by HotCopter ↑

Here's a high level estimate of the potential loss.

There was ~$1,095m ($1.1bn) of market cap traded between 25 Aug and 1 Dec. During this period, total shares turned over were 537m or ~48% of the float. The VWAP for the ~3 month period was $2.04.

The share price dropped to $1.325 on 2 Dec, the day that the lawsuit alleges the misleading information was finally disclosed (i.e. after this date the market was no longer mis-informed). The difference between the VWAP and $1.325 = $0.71. Multiply this by the shares traded during 25 Aug to 1 Dec and you get $383m. That's a high level estimate of the total loss incurred.

Obviously this would then change as the VWAP is rough and not everybody would have sold and incurred a loss. You actually have to sell and crystallise the capital loss to have a claim.

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But would the courts take the movement of the share price into consideration or would the court only concern itself with the amount allegedly misreported ?

EDIT: the stock dropped for other reasons that arent in question as well, so i find it hard to believe they would face that big a claim.

Last edited by bug1: 27/02/17

SPO Price at posting: 93.5¢ Sentiment: Buy Disclosure: Held
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0 Great analysis

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