KUALA LUMPUR: Several directors in The Media Shoppe Bhd have pared their stakes in the company, riding on a strong rally spurred by news of its plans to bid for a school management project.
Incidentally, the timing of this announcement on Jan 19 coincided with the listing of its 312.63 million new shares and 234.47 million warrants arising from the rights issue.
The rally in The Media Shoppe share price enabled its shareholders to rake in quick profits when they received new shares from the rights issue.
In fact, several of the ACE Market-listed company’s shareholders and directors have since sold some of their newly issued free warrants — with handsome gains.
According to filings with Bursa Malaysia, two directors — CEO Christopher Chan Hooi Guan and Chan Chooi Teng — have sold a total of 48.7 million warrants, or 20% of the total warrants issued under the rights issue.
The warrants were issued free to shareholders who subscribed for the rights shares, but were worth 10.5 sen each by the end of last Friday.
The fundraising exercise proposed last October comprised a 2-for-1 rights issue priced at 10 sen per share, together with free warrants on the basis of three warrants for every four rights shares subscribed.
On Jan 19, The Media Shoppe told Bursa Malaysia that its subsidiary TMS Software Sdn Bhd and Theta Edge Bhd’s subsidiary Konsortium Jaya Sdn Bhd entered into a teaming agreement on Jan 18 to work together for the submission of a proposal to the Education Ministry in relation to the Perluasan Sistem Pengurusan Sekolah (SPS) or school management project (see related story).
However, it should be noted that the parties are only planning to submit their proposal for the project. There is no deadline, time line or indicative chances of its success.
Still, that piece of news sent The Media Shoppe shares tripling in the past week, and shareholders who participated in the rights exercise appeared to have gained more than that.
The stock was trading at below 10 sen the previous week, and surged to 37.5 sen last Friday. The newly issued warrants closed at 10.5 sen.
According to calculations by The Edge Financial Daily, a shareholder with 4,000 shares bought at 10 sen each for RM400 would have been entitled to subscribe for 8,000 rights shares at 10 sen each (or RM800). He would have also received 6,000 free warrants.
After the rights issue, he will end up with 12,000 shares and 6,000 warrants, at a total cost of RM1,200.
Based on last Friday’s closing prices, these securities would be worth RM5,130, comprising RM4,500 for the shares and RM630 for the warrants.
This suggests a four-fold increase in the value of a shareholder’s investment in the company.
In other words, if one had invested RM100,000 in The Media Shoppe’s shares and taken up the rights issue, that investment would be worth RM427,500 last Friday.
That fact does not appear to have gone unnoticed among some of the company’s directors.
CEO Chan’s shareholding changed on Jan 19, after he acquired 44 million shares and 33 million warrants via the rights issue.
Chan and his spouse Li Chi Yeng collectively own the shares with Master Knowledge Sdn Bhd in which they have interest.
Chan was subsequently reported on Jan 20 and 27 to have disposed of 12.78 million warrants and 7.72 million warrants respectively, paring down his stake to 5.33%.
Chooi Teng, meanwhile, acquired 37.6 million shares and 28.2 million free warrants via the rights issue. She disposed of a total of 25.95 million warrants on Jan 19 and 20, and another 2.25 million warrants on Jan 27.
This article appeared in The Edge Financial Daily, January 30, 2012.
Incidentally, the timing of this announcement on Jan 19 coincided with the listing of its 312.63 million new shares and 234.47 million warrants arising from the rights issue.
The rally in The Media Shoppe share price enabled its shareholders to rake in quick profits when they received new shares from the rights issue.
In fact, several of the ACE Market-listed company’s shareholders and directors have since sold some of their newly issued free warrants — with handsome gains.
According to filings with Bursa Malaysia, two directors — CEO Christopher Chan Hooi Guan and Chan Chooi Teng — have sold a total of 48.7 million warrants, or 20% of the total warrants issued under the rights issue.
The warrants were issued free to shareholders who subscribed for the rights shares, but were worth 10.5 sen each by the end of last Friday.
The fundraising exercise proposed last October comprised a 2-for-1 rights issue priced at 10 sen per share, together with free warrants on the basis of three warrants for every four rights shares subscribed.
Chan and his spouse own 44 million shares and 33 million warrants with Master Knowledge Sdn Bhd.
On Jan 19, The Media Shoppe told Bursa Malaysia that its subsidiary TMS Software Sdn Bhd and Theta Edge Bhd’s subsidiary Konsortium Jaya Sdn Bhd entered into a teaming agreement on Jan 18 to work together for the submission of a proposal to the Education Ministry in relation to the Perluasan Sistem Pengurusan Sekolah (SPS) or school management project (see related story).
However, it should be noted that the parties are only planning to submit their proposal for the project. There is no deadline, time line or indicative chances of its success.
Still, that piece of news sent The Media Shoppe shares tripling in the past week, and shareholders who participated in the rights exercise appeared to have gained more than that.
The stock was trading at below 10 sen the previous week, and surged to 37.5 sen last Friday. The newly issued warrants closed at 10.5 sen.
According to calculations by The Edge Financial Daily, a shareholder with 4,000 shares bought at 10 sen each for RM400 would have been entitled to subscribe for 8,000 rights shares at 10 sen each (or RM800). He would have also received 6,000 free warrants.
After the rights issue, he will end up with 12,000 shares and 6,000 warrants, at a total cost of RM1,200.
Based on last Friday’s closing prices, these securities would be worth RM5,130, comprising RM4,500 for the shares and RM630 for the warrants.
This suggests a four-fold increase in the value of a shareholder’s investment in the company.
In other words, if one had invested RM100,000 in The Media Shoppe’s shares and taken up the rights issue, that investment would be worth RM427,500 last Friday.
That fact does not appear to have gone unnoticed among some of the company’s directors.
CEO Chan’s shareholding changed on Jan 19, after he acquired 44 million shares and 33 million warrants via the rights issue.
Chan and his spouse Li Chi Yeng collectively own the shares with Master Knowledge Sdn Bhd in which they have interest.
Chan was subsequently reported on Jan 20 and 27 to have disposed of 12.78 million warrants and 7.72 million warrants respectively, paring down his stake to 5.33%.
Chooi Teng, meanwhile, acquired 37.6 million shares and 28.2 million free warrants via the rights issue. She disposed of a total of 25.95 million warrants on Jan 19 and 20, and another 2.25 million warrants on Jan 27.
This article appeared in The Edge Financial Daily, January 30, 2012.
