When a company decides to dual-list its shares on the NASDAQ while already being listed on another exchange, it typically doesn't lead to an immediate drop in the stock price due to the announcement itself. However, there could be several reasons why the stock price might drop prior to or around the time of the dual-listing:
1. **Volatility and Market Conditions**: Markets can be volatile, and even if a company has positive news like a dual-listing, other factors may influence its stock price at that particular moment.
2. **Investor Concerns**: - **Dilution**: Dual-listing could potentially lead to increased dilution if more shares are issued to facilitate the listing on the Nasdaq. This might cause investors to sell their existing shares, driving down the price. - **Compliance Costs**: Maintaining listings on multiple exchanges can involve additional compliance and regulatory costs, which might negatively impact earnings and thus share price.
3. **Liquidity Concerns**: Some investors may perceive that dual-listing could lead to increased liquidity in their shares, prompting them to sell before the listing becomes effective, potentially driving down the price temporarily.
4. **Perception of Strategic Importance**: If the dual-listing is seen as a strategic move by management (e.g., to tap into new investment pools or comply with regulatory requirements), but investors disagree with its necessity or potential benefits, they might sell their shares, causing the stock price to drop.
5. **Market Sentiment towards Dual-Listing**: Some investors may view dual-listing negatively due to concerns about higher costs, increased complexity, or potential dilution. If this sentiment is prevalent at the time of announcement, it could contribute to a temporary drop in share price.
6. **Timing of the Announcement**: If the announcement coincides with other negative news related to the company's operations, financial performance, or broader market conditions, investors might sell their shares due to those factors rather than the dual-listing itself.
It's essential to note that stock prices can be influenced by a multitude of factors. While a dual-listing could potentially have an impact on share price, it doesn't necessarily mean that the company has made a poor decision or that its stock is a bad investment. It's always important to consider the full context and fundamentals of a company before making investment decisions.
Lastly, companies typically announce dual-listings well in advance to give investors time to digest the news and adjust their positions accordingly. Therefore, any temporary price drop might occur before or around the announcement date rather than immediately after it is made public.
take the above with a large spoon of salt
this is not advice.
I am considering buying back in at some stage but not yet. who knows I may recoup the $70k + loss I incurred selling at an average of $24.00.
AVR Price at posting:
$8.74 Sentiment: Hold Disclosure: Not Held
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