Skittish traders hit Advantage

By DANIEL RIORDAN

Skittish investors with poor arithmetic are being blamed for the hammering that technology stock Advantage Group is taking from the market.

The company's shares dived 16c yesterday following a 9c fall on Tuesday that prompted a "please explain" from the Stock Exchange.

At $1.22, Advantage shares are 32c (21 per cent) below Monday's opening price of $1.54, and a long way below their 52-week high of $5.65.

With investors already skittish about local technology stocks given Nasdaq's desultory performance (down 11 per cent over the past month and 44 per cent off its year-high), it seems all it took to spook shareholders was Monday's announcement by 37 per cent shareholder Qixel Capital Group that its shares in Advantage were being transferred to the individual portfolios of Qixel's shareholders, Eric Watson, Advantage chairman Evan Christian and Advantage director Nick Gordon.

Responding to the query from the exchange's market surveillance panel, Advantage's chief financial officer, Stewart McKenzie, said the main cause of the fall appeared to be Qixel's announcement.

DF Mainland technology analyst Bruce McKay agreed, saying the market began hammering Advantage immediately following the Qixel announcement, believing that the three shareholders had reduced their holdings.

But that was not the case, said Mr McKay.

"A few people who don't know how to use calculators and can't count decided Eric and the boys were dumping stock when all they were doing was adjusting the ownership structure."

He said the shuffling clearly showed the three investors' percentage shareholding had fallen since Qixel was created a year ago. But, as Advantage had issued around a third more shares in that time to finance acquisitions and provide employee options, the number of shares owned by the three had actually risen.

Asked by the exchange if there were any matters of importance concerning the company that it was about to release, and if such announcements could be made immediately, Mr McKenzie said the company would report its first-quarter results (to September 30), and update its trading conditions at tomorrow's annual meeting.

The presentations it would make to the meeting would not be ready to release to the exchange until then.

Concern that these results might be poor may also have contributed to the falling share price.

Mr McKay said: "The market is very skittish. Any sign of a hairline crack in the most insignificant place, and it's 'Get me out! Get me out!"'