Lost 80% share value overnight!

[succulentlove]

Hi all, my husband and I are currently small shareholders in iBPO AIM shares. iBPO has announced they intend to delist from the stock market ( reasons being regulatory burden, higher overheads etc.). The shares have dropped about 80%.

Overnight we've lost about £10k, presumably due to the future loss in liquidity of these shares. Our shares are now worth about £3k.

Just wanted to get some views as to whether you would hold these shares (so be a shareholder to this private company) or sell now while still listed on AIM ?

Thanks!!

I'm not a financial adviser, so these are just my own thoughts on it...
How diversified is your portfolio, and what percentage of your assets are invested in this one company?
It's a gamble to keep hold of them, and I think you would have to approach it in that light. However selling is locking in your losses.

My understanding is somewhat sketchy but a couple of major factors stand out:
I think that once the delisting happens, as the company is not UK based, the usual protections for smaller shareholders will be lost?
It would appear the management has over 80% holdings, giving them the option of a share buyout without consultation. The cynic in me ponders that devaluation of shares might prove very advantageous and profitable for them.

How much do you trust the management?

I had bank shares worth about 35k at one time .They dropped like a stone. Today they are worth perhaps 2k. I will never sell them to consolidate the loss. I just forget about them really and take a tiny dividend twice a year. They will be left to my son and daughter in my will at worst . At best if share prices improve I may cash them in. Any direct investment in company shares is high risk. You win some. You lose some.

Thank you! We don't know management at all, the remaining value is not a very small proportion of our portfolio.

Ouch! I suppose you never forget. Lesson learnt!

It was a shock at the time but there is no point stressing about things you can't change. As you say lesson learned and move on.

https://www.ienergizer.com/?page_id=620

The CEO is the principal shareholder and founder.

‘the remaining value is not a very small proportion of our portfolio’. Eeek!

If this holding forms the majority of your portfolio, I think I’d be tempted to do what @Happygirl79 suggests and hold it for the long term in hopes it comes good eventually. Your investment was essentially a high risk gamble (perhaps stick to lottery tickets or a bet on the Grand National for this next time!).

Going forward, I would research much more into investing your future savings with minimal risk - low cost diversified index trackers such as a Global Fund or S&P 500. Such investments might show short term volatility but the risks in the longer term are low.

If they do delist and you continue to hold also remember the tax rules will likely change so factor that into how you treat them.

Given the drop on Friday outs the sort of AiM share that will attract interest this week so whether you attempt to recoup through trading this week is another consideration.

Is it a large part of your portfolio? It's a high risk hold in the first instance being AIM listed

You shouldn't be investing in single securities for this reason. Try ETFs if you want a bit more risk or a more adventurous active fund. Usually funds with "special situations" in the title are big gambles, but possibly less so than your current approach. Most platforms have an automated investment goals wizard to help you choose the right fund for you. Just go set yourself up with an account at Fidelity or Hargreaves Lansdowne (I dont work for these but I work in investment management).

Downside to holding - once the shares are delisted they will be much more difficult to sell, at least now you have the chance to do so. Upside, if the company comes good then management will eventually want an exit and if they find a buyer you will get the same for your shares as they do for theirs. But that might take a very long time or even never happen. Can you afford to write it off completely/wait for years in the hope something happens?

Small consolation but someone sold £335k of the share this afternoon. If they'd been holding last week they had £3.3m

Why would any of the other shareholders losses be any consolation?

I am a financial adviser, and there's no one on this thread who can give you the answer to this question. Very few people on the front line of Investment Management would even research and cover this stock.

All I will say is if you weren't in it already, would you buy £3k of it today? If the answer is no, then that tells you something. Everyone earns their stripes in the market, and the admission fee is often learning that a diversified approach, with a buy and hold strategy is best, and the biggest gains you'll make are through tax relief.

Sorry i meant to say it IS a very small portion of my portfolio

No I wouldn't buy £3k of it today. Thank you for your advice, it's helpful

It looks to be on the rebound. It's up 112% today. From what I can see any decision on going private is going to be made on 14 May. Hold for a bit longer. I suspect you'll get some money back.

Yes we are holding - fingers crossed

I'd sell and put £3k into commodities. Shell, BHP, BP, Chevron, Hess, Total Energies and also BAE systems. They have all done well over the last year.

I'd sell. You have to look at the opportunity cost of keeping them. If you sell and invest in something less risky you could make good your loss more reliably compared to holding on for a "maybe".