Bedlam behind penny stock’s 7500pc rise and fall https://www.afr.com/rear-window/bedlam-behind-penny-stock-s-7500pc-rise-and-fall-20210516-p57scr It’s not often a stock surges more than 7500 per cent in a lifetime, let alone a day. But hitherto little-known West Australian gold and iron ore tenement holder Mindax Ltd rocketed from a 1.5¢ open on Friday to 23.5¢ by lunchtime, before giving back 84.2 per cent to close at 3.7¢. One self-styled trader boasted on social media of making an unverified $1 million trading profit over the morning, perhaps in his dreams, while another boasted on Facebook of day trading “100k on this baby”. Reddit’s zany ASX Wall St bets forum also had a user posting Mindax trades and profits to other users. At its peak, the whipsawed-explorer boasted a market cap of about $400 million before losing $337 million of its value over the afternoon to close on a $63 million market cap. This still isn’t bad for an explorer with no operating cash inflows and balance sheet assets of just $4.6 million made up of $1.9 million in cash and tenement exploration assets valued at just $2.7 million. The largely Chinese-owned miner lists its largest shareholder as Lai You, who accounts for 11.82 per cent of the register, with Meilian Zheng and Jianchun Yung the next two largest holders, accounting for 6.52 per cent and 6.42 per cent of the register respectively. On the same day as the yet-unexplained trading frenzy, Mindax was returning from a near two-year ASX suspension for non-compliance with listing rules when it last closed at 0.3¢. But even a revaluing of the long-suspended stock’s tenements in light of rising iron ore and gold prices would hardly explain the day’s frenzied trading.
When I spotted this Friday and quickly checked my notes, I decided there and then I wouldn't touch it with a barge pole.