REXLot Holdings Ltd. suspended its shares from trading in Hong Kong after they tumbled on a research report questioning the lottery machine maker’s accounting.
REXLot sank 9.3 percent to 44 Hong Kong cents, the lowest intraday level since August 2012, before the stock was halted from trading at 11:33 a.m. local time. Volume was about quadruple the three-month daily average. Anonymous Analytics rated the company a strong sell with a target price of 12 Hong Kong cents in a report today, saying REXLot exaggerates its revenue and the amount of cash on its balance sheet.
Trading in the shares was suspended at the company’s request “pending the release of a clarification announcement, which is inside information in nature,” according to a regulatory filing.
Two calls to REXLot’s Hong Kong head office were answered by a woman who said the company didn’t have anyone authorized to talk to media, before hanging up. A third call was answered by another woman who said the investor-relations team was in a meeting. An e-mail sent via REXLot’s website didn’t get an immediate response.
Even before Wednesday’s plunge, REXLot had slumped 23 percent this year, as the city’s benchmark Hang Seng Index advanced 16 percent. Brokerages including Daiwa Securities Co. and Cinda Securities Ltd. are bullish on the stock.
Anonymous Analytics describes itself as a faction of the Internet group Anonymous. The stock researcher said in the report that it doesn’t have any “direct or indirect” positions on REXLot securities, while noting that its clients and affiliates might.
Short interest in REXLot climbed to 6.6 percent of outstanding shares on Monday, more than four times higher than this year’s low in March, according to data compiled by Markit Group Ltd.