Auctus Investment Group (ASX:AVC) – a nanocap at this stage – has been forced off the Australian bourse given the reality of its illiquidity.
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At that stage, why bother paying the hefty fees associated with being listed on the ASX?
If shareholders or the market agreed, that wasn’t particularly obvious. Shares actually increased 4% on Friday after Auctus announced it is ditching the ASX in May this year. The ASX has already ticked off on the move.
So, perhaps a strange shareholder reaction, though, they’ve got until May to play around with the stock. Except nobody is really playing around with it – that’s the problem.
“Notwithstanding the Company’s ASX listing, AVC has regularly struggled to attract liquidity on the ASX,” Auctus wrote.
“AVC’s trading range data indicates AVC shares are thinly traded on the ASX… the limited liquidity means limited trading can have a disproportionate impact on share price.”
The company also noted it has a large base of retail shareholders with small amounts of shares – god forbid.
But the company has a point. Auctus expects to save $350,000 a year by delisting off the ASX. Just being on the share market at all isn’t exactly cheap.
“The board believes that the ongoing administrative, compliance and direct costs associated with the company’s ASX listing are disproportionate to the benefits of remaining listed,” the company added.
AVC last traded at 64cps.
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