sovereign key

Further to my previous post, I can confirm that the primary cause for the pull back in ETC's share price from 50c in June was continued selling by Sovereign Key. At May 29, SK held 21.5mill shares (5%), but by June 30, SK held just 9.5mill shares (2.2%), which means they sold 11mill shares through June.

I suspect that SK have continued selling in July and that they were behind the recent cross trades (brokered by Lodge).

SK paid an average (post consolidation) price of 32.5c for the their holding, and started locking in profits when ETC's share price rose above 40c in May.

It is my understanding that SK had always preferred to have a stake in ETC below 5%, but they decided to resume their selling when global share markets started tanking in mid June.

SK may have sold out completely by now, but if they haven't, their current holding is probably only a few million shares.

Interestingly, ETC's top 40 shareholders increased their total stake in the company from 66.4% at May 29, to 74.16% at June 30. And the bulk of this buying was done by the top 10 (inclusive of combined nominee accounts). So, while SK was selling, and while nervous small retail investors were selling in late June, institutional buyers and wealthy individual investors were loading up.

It is unusual for top 10 share holders to buy 8% of a company on market over a 2-3 week period, but for the share price to decline. However, I believe that once the other institutional buyers realized that SK was continuing to sell in June and that small retail investors were jumpy, they took advantage of this and programmed their bot traders to engineer a lower share price.

It is also interesting to note that, since Jan 1, a massive 252mill shares in ETC have been traded, with the vast bulk of these trades occurring following an important April 1 fund manager presentation in Melbourne (which coincided with the start of printing for the Malaysia Immigration Contract).