Raffles Education Corporation Limited (Raffles Education) has just announced a placement of 95 Million of shares at $0.30 on 28 Sep 2017.
At that time, their share price was $0.320.
However, if you look at the rise in share price, you can see that it was “pumped” to $0.320 within a short time frame.
What exactly happen?
It seems like one of our Singapore Richest, Mr Oei Hong Leong, decided to increase his stake Raffles Education from 10.43% in Sep 2016 to 14.04% in Sep 2017.
I personally believe Mr Oei purchased Raffles Education for business purpose. I doubt he is trying to do anything funny.
However, this may have led people who followed him to get stuck at $0.320 if they purchase at a high just before the announcement of the shares placement.
In the meanwhile, the financials of this company seems to be in pretty bad shape. Although I may not have taken a close look, but for the last 4 quarters, it only turn profit at the last quarter. The full year net profit margin was only 0.2%. Do bear in mind that the revenue exclude the $11.1 Million of other operating income.
In addition, do note that the placement shares are meant to pay off the debts.
There are some rumors that state that the placement shares might be for the company to regain control or might be for the company to sell more shares in a bulk to Mr Oei.
Nevertheless, I believe, for those who are stuck at $0.32 now, it may be better if you have just use the money to buy some REITs or Blue Chips.
If you are interested to know more about The Ultimate Scorecard or Full Analysis, do visit the Fundamental Scorecard website for more information! Do sign up to get the latest scorecard of all the SGX counters now!
Oh... and do remember, please like our Facebook page (T.U.B Investing) and follow me on InvestingNote.