ATM - A2 Milk Corporation Limited

[winner69]

How many more times do I need to look at the 57 number being hit dead on 5pm? It's really quite unusual. A bit baffling really. It's as though a broker is given the order to sell to whoever is on the market at 57 and above. In other words just take them out. No SSH notices either?

Must be some dodgy stuff going on?

[NT001]

How many more times do I need to look at the 57 number being hit dead on 5pm? It's really quite unusual. A bit baffling really. It's as though a broker is given the order to sell to whoever is on the market at 57 and above. In other words just take them out. No SSH notices either?

This is what I've been commenting on for some time. It is very suspicious. How does one go about raising this with investigators? It bears some resemblances to the case in which Brian Henry was convicted for manipulating Diligent shares, partly by manipulating the closing price. In that instance the NZX referred the matter to the FMA. Is there a view amongst us that an inquiry should be called for? I know some on the thread think it's just natural market forces at work, but that doesn't really wash. Of course one has to think a bit about the impact an inquiry could have on the upcoming Aussie listing. On the other hand, if it IS manipulation designed to distort the Aussie launch, or to lay the ground for a takeover bid of some kind, better that it be done before too late.

[Harrie]

Having said all that NT I am of the view that there is nothing illegal going on, just some one wanting out. There is nothing wrong with giving an instruction to a broker to sell to any buyer who has a bid price of 57c and above. There has to be stock to sell, as you can't short the market on these shares. A seller has the right to sell whatever volume at whatever price at whatever time. Thats my take on it, but if it is one particular seller doing this there is an awful number of shares being sold down which would theoretically trigger a SSH disclosure.
I'm a bit surprised that there was an enquiry around this same point with diligent. I was unaware of that. What was the result of that enquiry?

[Harrie]

Just thinking that if AMP capital is still selling then they will be under the 5% threshold now and therefore no need to issue a SSH disclosure notice.
Trading is around 500k average a day and this has been going on for a few months. Assume half of it is AMP at avererage 250k a day over 3 months = approx 60 trading days = 15mil shares. From memory they had 37 mil so many more to go yet. If they are selling the lot which they appear to be insistant on doing then expect the 55 to 57 range to hang around a lot longer yet and the 57 buyers to be continually hit at 5pm.

[NT001]

Having said all that NT I am of the view that there is nothing illegal going on, just some one wanting out. There is nothing wrong with giving an instruction to a broker to sell to any buyer who has a bid price of 57c and above. There has to be stock to sell, as you can't short the market on these shares. A seller has the right to sell whatever volume at whatever price at whatever time. Thats my take on it, but if it is one particular seller doing this there is an awful number of shares being sold down which would theoretically trigger a SSH disclosure.
I'm a bit surprised that there was an enquiry around this same point with diligent. I was unaware of that. What was the result of that enquiry?

Here's the FMA's report on the Brian Henry case. I haven't boned up on the full details of the case enough to know how comparable it was. There were much bigger issues against Henry than in just setting the closing price but that was part of the allegation against him.

https://www.fma.govt.nz/keep-updated...t-manipulation

I accept completely that it is a seller's right to give such an instruction to a broker, but the absence of SSHs does make one wonder. It seems to me that it's not impossible that circular bidding is going on, aimed at setting the price, but I'm not by any means expert enough in how the market operates to know whether this could be the case.

[Harrie]

Thanks for the article re Brian Henry NT.
I can see that there is an issue if a shareholder is manipulating a market up for the purposes of selling shareholding into it after a false impression of volume and share price, but I'm not sure if the same issue apply's to manipulatng a SP down, unless its for the purpose of a takeover bid, in which case you have to prove intention. Moreover in the Diligent case manipulation was a lot easier because of illiquidity whereas thats a lot harder in ATM as its more liquid and far more dangerous to a seller at these levels given the potential growth tragetory in the longer term.
No, I think it is just one or two institutions thinking they are over exposed, a change in portfolio management philosophy or some other reason that is driving them to sell down IMO.

[Harrie]

Correction: Make note to broker to take out anyone with a buy order of 56c or above at 5pm!

[sb9]

Make that 54c now, the knives are out....

[Kirk]

Whats caused this share price drop? Are investor expecting A2 to announce another low profit period due to the impact of the high exchange rate along wiht increased levels of investment in new markets

[MAC]

Whats caused this share price drop? Are investor expecting A2 to announce another low profit period due to the impact of the high exchange rate along wiht increased levels of investment in new markets

Not really,

From the FY14 report;

“Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly during that period, in which case the exchange rates at the dates of the transactions are used”

It would seem that although the half year to 31 December 2014 ended with NZD/AUD = 0.95, the average exchange rate for the reporting period was around 0.92, around 0.88 for the prior HY period.

Thus a move of around 4.5% for the pending HY15 report, compared with the dramatic 12.5% move we saw at FY14 reporting.

ATM have told us that the first four months of the HY15 reporting period saw Australian sales growth of 38% in AUD terms.

http://thea2milkcompany.com/wp-conte...esentation.pdf

Extrapolating that growth rate and applying the exchange rate movement, provides for estimated HY15 revenues of around NZD$71M (+32%).

Perhaps we may also see a little contribution from introductory fresh milk sales into china and maybe, perhaps we all hope, an uptick in UK growth too.

It’s all coarse I know, but I don’t think the pending HY will really look too shabby actually ?