Mystery Share Price Surge Continues at Danish Real Estate FirmBy
It’s “Russian roulette with 3 bullets,” NordNet analyst says
Analysts, traders still don’t know what’s behind the move
A mystery that gripped Danish equity markets on Monday continued for a second day with no one able to explain why a penny stock that used to focus on the German property market was still soaring.
Victoria Properties A/S added as much as 195 percent at one point on Monday, prompting a statement from management reminding traders that the company had close to zero equity. That message seemed to make some investors reconsider, and gains were pared with the company ending the day just 3.8 percent higher at 10.90 kroner.
But on Tuesday, Victoria Properties rose as much as 65 percent and traded 20 percent higher as of 10:55 a.m. in Copenhagen. So far this year, its share price has increased 332 percent, giving it a market value of 60.6 million kroner ($8.8 million).
Traders and analysts called by Bloomberg couldn’t explain the extreme 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.
Per Hansen, an investment economist at NordNet, characterized the trades as equivalent to “playing Russian roulette with three or more bullets,” according to a tweet. People are investing “blindly,” he added.