Active Alliance, Incorporated (AAI): Reply to unusual price movement (PART TWO)

Six trading days, five immaterial corporate disclosures, and one unconfirmed rumor later, AAI’s share prices rallied to an all time high of Php 102.80 before closing at Php 76.00 today. That’s a mind-boggling, astounding, shocking (and I shall further add, envious) 730% increase from Php 9.15/share!

To illustrate this non-sense, I’ve included a chart of AAI’s closing prices below to visually demonstrate how steep a line could go up in one week.

 

Since I last wrote on AAI’s unusual price movement, news - or as to properly re-classify - rumors have emerged indicating that there is a possible backdoor listing play on AAI’s somewhat dormant stock.

According to Doris Dumlao in her Biz Buzz column on the Inquirer’s Business section, “stock pundits are betting on a prospective backdoor listing. More specifically, some are betting that this is now the listing vehicle being eyed by tycoon Ricky Razon for Bloomsbury Investments, which is building a $1.2-billion integrated casino and tourism facility in Pagcor City. The “Razon” play has shifted to this stock from IPVG.” http://business.inquirer.net/30617/biz-buzz-too-successful

However, AAI’s Corporate Secretary, Christine Base has clarified on a separate disclosure to the PSE that “the management of AAI is unaware of the transaction alluded to in the article quoted above. Neither does it have in its possession any material information pertaining to the alleged impending backdoor listing.” http://www2.pse.com.ph/html/disclosure/pdf/2011/pdf/dc2011-8054_AAI.pdf

Whether or not the rumor is legitimate, AAI’s on-going six day rally is similar to PWR’s (East Asia Power) bull run back in July this year when it’s share prices traded from Php 0.81 to Php 5.66. This was shortly after an official deal was closed by Century Properties to acquire PWR for its backdoor listing play. Due to PWR’s overheated increase in its stock prices during that period, a sell-off eventually lead to the rally’s demise with its share prices crashing over 50% in a single day. 

With no material information to support AAI’s ridiculously overpriced shares, I’m pretty sure you would agree with my crystal ball’s prediction that AAI’s stock prices will fall in a matter of a short period of time. For those who decided to participate or ride along in this non-sense, I highly suggest you drop AAI like a bad habit.