Business Times - 01 Jun 2011
Artivision takes another hit
IN what could be a reality check, the stock of Catalist-listed Artivision Technologies took another hard knock yesterday, the second time in the past three trading days.
The counter plunged almost 28 per cent in price, shedding 6 cents to close at 15 cents. This was a further drop from last Friday's 6-cent or 22 per cent dive to 21 cents.
The technology start-up's stock price had earlier risen five-fold over the course of a month, from 4.5 cents to a high of 29 cent, following its unveiling of a new product. Called Advision, the product is an online advertising application aimed at allowing social networking users to monetise online content via embedded advertisements.
The big price retreat last Friday had prompted a query from the Singapore Exchange. Artivision replied that it was unaware of any unannounced information that, if known, could explain the trading.
The share fall followed the release of its fiscal fourth-quarter results, which resulted in a full-year net loss of $5.7 million and a negative equity of $965,000. The year before, the net loss was $7.46 million.
Artivision's new Advision product is a departure from the company's mainstay in computer vision technologies. It has attributed the fall in group revenue to strong competition in the video management industry.
Straits Times
Jun 1, 2011
Companies
Artivision plunges 27.9% to 15.5 cents
Investors flee in wake of firm's $5.72 million loss and clarification about lack of Facebook deal
By Goh Eng Yeow, Senior Correspondent
LOSS-MAKING Artivision Technologies shed more than one-quarter of its market value yesterday as the stampede by investors for the exit gathered pace.
A staggering 73.3 million shares changed hands, making it the most heavily traded stock yesterday. This is almost twice the average daily volume of 37.7 million traded in the past four weeks, as the counter plunged 27.9 per cent to 15.5 cents.
'So fast, the game is over. Artivision experiences the equivalent of a dot.com boom and then bust in the space of one month,' said one dismayed trader, caught with shares bought last week at a much higher price.
Interest in Artivision exploded early last month, after it said it had developed an application allowing advertisements to be inserted seamlessly into videos on popular websites such as Facebook.
Within days, its share price quadrupled to a high of 30 cents, fuelled by speculation that it had inked a deal with Facebook to enable millions of Internet users to use its advertising software to get revenues on their online video postings.
But Artivision clarified about two weeks ago that while it had loaded the application known as Advision on Facebook, it 'had not entered into any commercial contract with Facebook nor any other social website'.
Dealer Bernie Lee said the sellers were a potent combination of short-sellers and buyers who decided to cut their losses after scaling down their purchases when Artivision shares fell sharply last Friday.
'There was no support when the price fell below 20 cents this morning and the vicious selling cycle starts from there. It was all the way downhill, as buyers get mowed down along the way,' Mr Lee said yesterday.
Until late last week, Artivision's share price hovered at about 27 to 28 cents, despite its clarification to investors about the lack of any commercial deal.
But last Friday, its share price plunged 22.2 per cent after the company reported a full-year loss of $5.72 million which left it with negative equity of $965,000.
Its share price then stabilised on Monday before resuming its plunge yesterday. In all, Artivision has lost 42.6 per cent, or $55 million, of its market value in the space of three trading days.
'The punters chasing Artivision probably thought that it had a deal with Facebook in the bag. It was only after the plunge in share price last Friday that they took a closer look and realised they were mistaken,' said trader Peter Ong.
Yesterday's plunge was a double whammy for the traders who had to pay up for purchases transacted last Thursday when Artivision closed at 27 cents.
Even as they tried to cut losses by clearing their outstanding positions, rather than picking up their purchases, they found the price being depressed by a flood of short-sellers who were eager to capitalise on their misfortune by selling shares they did not own in the hope of making a profit when they buy them back at a cheaper price later on.
'Unless Artivision can cut a deal with Facebook soon, the company may find it tough to make a come-back,' said one dealer.
[email protected]
Homepage
PR Newswire
