What made this stock crash on ASX – Funtastic Limited ?

Intention to withdraw from ASX: Funtastic Limited (ASX: FUN) stock lost over 46.67% on March 27, 2017 as the group expressed its interests in withdrawing from ASX official listing. The group’s announcement came at the back of the low level of liquidity in their shares. The group reported that in the last six months, monthly trading volumes of their shares have been consistently less than 2% of the total shares on issue. Given this lower liquidity, the group’s stock prices have been volatile wherein the stock lost over 6.3% in the last six months (as of March 24, 2017). By virtue of this move, the group expects to raise capital leading to enhance their business which would have a positive effect on their ability to restructure its debt arrangements. As per the advice that the group sought from the ASX, the removal would be subject to approval by ordinary resolution of ordinary security holders, a statement to the effect on removal and update on current negotiations with financiers. FUN further advised that a formal share buy-back, sale facility or any other arrangement for disposal of shares held by its shareholders prior to de-listing does not seem to be an option. Accordingly, shareholders can continue to trade their shares with a willing counterparty on-market on ASX up to the date of the removal from the official list, in case the shareholders approve the company’s removal from the official list. On the other hand, shareholders wishing to trade their shares after this date will be entitled to transfer their Shares off-market to a willing third party purchaser in accordance with the Company’s Constitution.

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