Japaul Gold slumps by 30%, after rallying to 52-week high of N1.67 on Monday

Japaul Gold stocks slump by as much as 30% in three trading sessions, as investors on NSE continue to sell off shares of the rebranded Gold exploration and mining company, after rallying by 146% in 11 days.

It is important to note that the shares of the rebranded and restructured company with a new focus on Gold exploration as its new name suggests, rallied to a record 52-week high of N1.67 on Monday, as buying pressures moved year-to-date gains to 169.4% at mid-day.

However, profit-taking activities by investors saw the shares of the company dip by 15% from N1.67 to close the market on Monday 25 kobo lower at N1.42.

A preview of the performance of the shares of the company by Nairametrics at the close of trade on the exchange today revealed that Japaul shares slumped by 30.5% from its 52-week record high price of N1.67, which was recorded on Monday 18th January 2020, to N1.16 at the close of trade on the exchange today.

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What you should know

• As investors continue to price the shares of Japaul Gold down, it is important to note that the management and the board of the company have taken avid steps to restructure the company and place it on the path of sustainable growth.
• One of these efforts is the recent restructuring of the business model of the company. In line with this, a Nairametrics report revealed that Japaul Gold signed a partnership contract with H&H Mines Limited to mine gold. The company had also concluded discussions and received approval in principle from representatives of H&H Mines Ltd for Japual Plc to invest in and/or acquire some shares of the company.
• The company had also taken proactive actions to reduce debts and cut down on deadweight costs which impacted the profit of the company in the past.
• A recent report by Nairametrics revealed that Japaul Gold in recent times had erased what was left of its debt, and also cleaned up its balance sheet from negative equity of N35.5 billion. The company’s net assets is now N4.78 billion.

What to expect

A decline in the shares of the company is expected tomorrow as over N28.9 million units of the company’s shares, worth N33.5 million were offered today at N1.16 without a single bid.

This suggests that investors will likely offer the shares of the company at a lower price tomorrow to avoid being trapped, as the shares of the company continue to shed value.