Ferronoux Holdings [FERRO 4.35 ?19.2%; 330% avgVol] [link], a non-operational holding company owned by Michael Cosiquien, disclosed that its board of directors approved a private placement of 80 million common shares, at a price of P1.00/share, to Themis Group. The shares being sold are primary (out of FERRO’s authorized but unissued capital stock), and represent a 23.4% stake in FERRO once the subscription agreements are executed and the 25% downpayment is made by Themis to FERRO. In a related disclosure, the company also revealed that Themis obtained two FERRO board seats as part of the deal, with Philipe Aquino and Abel Almario replacing Jesus Chua Jr. and Yerik Cosiquien.
MB BOTTOM-LINE: Who knows what’s happening here with yet another high-flying shell company? It can’t be a great sign for the health of our market that some of the most interesting stories have been the useless companies shooting up in price as bored speculators try to anticipate the next company to get backdoored. We don’t have any info yet to say what will happen next. Themis’s stake is too small to be considered a backdoor, but the parties might not be done and there might be some other aspects to this deal that could lead Themis to take a controlling stake over a period of time. The important thing for me to say here is that--like with the AsiaBest [ABG 26.20 ?1.1%; 0% avgVol] situation--there are no guarantees that anchor these speculative valuations. As they say, stocks (even speculative ones) take the stairs up, but the elevator down. Anyone playing in these stocks should have already made peace with the risks they’re taking on. These trades are not for beginners. I mean, we’re all adults here, but from one internet stranger to another, if you’re new to the market, please don’t put your money into attractive hazards like these.
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