Jump of 930% Baffles Danish Property Firm With Near-Zero EquityBy
Victoria Properties, a Danish penny stock, top gainer of 2017
Management sends statement reminding market it has no equity
A small Danish property company started 2017 as the biggest winner on the Copenhagen stock market, surging as much as 930 percent since the end of last year. But there’s a problem: Management has no idea why and is trying to talk sense to investors.
Victoria Properties A/S, which had focused on German real estate, on Monday had to remind the market that its equity is gone, responding to a jump in its share price as big as 195 percent in early trading.
“The management in Victoria Properties wants to make clear that there has been no change in Victoria Properties’ economic conditions and that no plans have been disclosed regarding the company’s future strategy,” Chief Executive Officer Rasmus Bundgaard said in the stock-exchange announcement. “The company’s equity is therefore still equal to about zero kroner.”
The announcement seemed to encourage some afterthought among market participants, with Victoria’s shares paring gains before trading about 23 percent lower. By around 4:30 p.m. local time, the shares were up roughly 3 percent at 10.80 kroner. That values the penny stock at 50.4 million kroner ($7.3 million). Trading volumes were well over 30 times their three-month daily averages.
Traders and analysts called by Bloomberg were unable to explain the company’s share move on Monday. Most of the trading was done by a brokerage that mainly serves retail clients, called NordNet AB. Its transactions accounted for about half of total trades.
Victoria’s shares had fallen for six straight calendar years before 2017, so even after January’s stunning gains, the company is still worth about 98 percent less than at its 2006 peak, just before Denmark’s property bubble burst.
The last time the company issued stock-exchange announcements was on Dec. 29, when majority owner Euroinvestor.com sold its entire 64.95 percent stake to three different companies, including one controlled by Victoria’s CEO.