Quickflix queried by ASX on unusual trading volume
The Australian Stock Exchange has queried DVD rental and online streaming company Quickflix over a recent surge in the price of its shares rising from a 1.7 cents to a high of 2.2 cents in just two days.
In a letter to the company the ASX queried the share price spike and also “an increase in the volume of trading in company’s securities over this period.”
Quickflix share movement in the last month. Source: Yahoo
The ASX asked the company which has recently gone to market with a capital raising whether the company was “aware of any information concern it that has not been announced to the market which if known by some in the market, could explain the recent trading in its securities?”
In its written reply the ASX Quickflix said there was no information that had not been announced to market. However, the company argued that its recent capital raising and a placement to so-called sophisticated investors, who are experienced investors given access to discounted shares, could have been a factor in the spike.
“(Quickflix) has recently completed a fully underwritten rights issue closed approximately 191 million shares in the company have trade in a price range between 1.2 cents on 18 October 2013 and 2.2 cents today,” the company wrote.
“The company also completed a placement to sophisticated investors prior to the rights issue and is seeking approval at its AGM for a further placement to sophisticated investors.”
The company said these placements may see increased trading in the Quickflix share register in the coming months.
In September, Stephen Langsford, the chief executive of Quickflix defended the new capital raising, the third in a year, saying the $5.5m will be used for more marketing and invested in greater content for the service.
Quickflix share price was at 1.7 cents this afternoon.
Nic Christensen
