The year has been a troubled period for shareholders of SCOA Nigeria, as they have lost 60 percent of their investment year-to-date, according to Ripples Nigeria analysis of the firm’s capital market.
SCOA Nigeria operates a diversified business, with its portfolio containing Automobile Sales, Maintenance, distribution and Leasing, Manufacturing, Technical Sales and Services.
The quoted company is also into General Merchandising, Power Generation, Furniture and Agriculture, as well as Production of foods and fruit juices.
Ripples Nigeria findings showed that the capital market and regular business hasn’t gone smoothly this year, and this is pushing investors out of the firm.
SCOA Nigeria losing billions of naira to investors’ low confidence
Analysis of the firms capital market activities showed that investors are running for the door, and this has cost those that chose to stay N1.14 billion, representing 60 percent of their investment YTD.
In the first six months of 2021, the total worth of shareholders investment depreciated by 33.4 percent, as sell off among capital market investors wiped off N636.82 million in H1.
Further breakdown of investors exit showed that while the investment remained flat between third week of May (with stock sold at N1.95kobo per share) into first week of August, stakeholders started another sell-off round.
This resulted into 40 percent drop in total capital market investment as of September 14, 2021, as shareholders lost N506.86 million – this brings the total loss from YTD to N1.14 billion.
Why are investors selling off their shares in SCOA Nigeria?
There’s a negative cloud hanging above SCOA Nigeria, and this has attracted the bears who are running scared, selling off their shares out of fear that their investment might lose value going forward.
And their fears proved true after 60 percent of their fortune was wiped off as the market turned negative. The downward trajectory of investors’ asset could be linked to the poor financials of the company.
SCOA Nigeria released its Q2 financials on July 30, reporting to investors that its revenue generation for the period dropped by 77.3 percent to N806.45 million quarter-on-quarter, when compared to the N3.56 billion grossed in Q2 2021.
Following the announcement, more investors rushed to protect their investment by dumping their shares after a sell-off break between Q2 and early Q3 2021 – the sell off resulted into a loss of N506.86 million for holders of SCOA Nigeria asset.
This showed the results were not well received by capital market investors who are engaging in share dumping at whatever price. Between January 1 and September 14, the stock price of SCOA Nigeria has lost N1.76kobo in value, depreciating from N2.93kobo to N1.17kobo.
Note that investors didn’t enter 2021 with enough motivation and incentives, as the company’s Directors did not recommend to members the payment of dividend for 2020.
Management affected by investors’ sell-off
Ripples Nigeria analysis revealed that top management’s investment was heavily impacted by investors sell-off, as the Chairman, Henry Agbamu’s total investment worth dwindled from N403,879.99 it started 2021 with, to N161,276.31 as of September 13, 2021.
The Managing Director/CEO, Massad F. Boulos’ investment also declined to N1,345.5, from N3,369.5 in the last nine months.
While investment of another director, Prince Boniface Nwabuko, the Chairman of SCOA Nigeria’s Governance and Remuneration Committee, dropped from N7,325 to N2925 during the same period.
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