Why is Lantrovision consolidating its share 5 to 1 when it is not required under SGX rule?

August 27, 2015 at 7:52 pm Leave a comment

Disclaimer: I am vested in Lantrovision so opinion will be biased.

Lantrovision just announced that it is consolidating its shares 5 to 1 and cited the reason is to attract more interest in its share, presumably that a higher price will attract fund managers. SGX rule states that only shares under 20 cents on mainboard need to consolidate shares, but Lantrovision share is presently trading way above it around 40 cents and its cash- total liabilities value is about 20 cents, thus it is highly improbable that shares will drop below 20 cents unless it fritters away the cash.

If Lantrovision seriously want to attract fund manager interest, a better way is to deliver consistent, predictable dividend, preferably growing. It has just cut its dividend from 3 cents to 1.3 cents probably due to the worsening outlook ahead, that’s not the way to attract interest.

Entry filed under: Investing. Tags: .

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