By PETER GRIFFIN
Auckland-based communications software company Telemedia told the Australian Stock Exchange yesterday that its shares were more realistically priced after news of boardroom restructuring, answering a stock exchange query about a sudden tripling of its share price.
Telemedia's shares jumped from 30Ac in the middle of last week to break the dollar mark this week.
Telemedia put the pre-announcement rally in its share value down to a general surge in market activity last Thursday. "On that day the whole market moved considerably on the back of the US cut in interest rates and the significant increase in the Nasdaq market."
Telemedia said its stock was possibly "oversold" at the time of its steep price drop and that a recent company announcement "had boosted confidence in the security."
That announcement came on Friday, with Telemedia indicating that board restructuring, first announced at the beginning of the year, would include the addition of two US-based non-executive directors.
Sun Microsystems chief financial officer and executive vice-president Michael Lehman and Qwest Communications' chief information officer and executive vice-president Cliff Dodd join the board, as well as former Pirelli Cables chief financial officer Lindsay Kelly, who is based in Australia.
After the news of boardroom restructuring, the Sydney Morning Herald questioned Telemedia's substantial share price gains in the days leading up to the company's news, saying the movements had "caught the eye of corporate regulators, concerned price hikes before announcements are becoming a habit."
Telemedia's chief executive officer, Chris Jones, described the paper's claims as an exaggeration.
Telemedia shares closed yesterday at 80Ac.
Telemedia says board change hit price
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