XOX made poor debut last Friday. Even though the IPO has been oversubscribed by 13.2 times, the listing of XOX plunge 35% on its 1st day listing, down 28 cents from its IPO price of RM 0.80 and closing at RM0.52. The stock seems to continue loosing this morning but ramp up in the afternoon session closing 0.5 cents higher at RM 0.525.
Poor debut is likely due to reaction from frustrated investors on the poor 1st Quarter financial report released just a day before listed. The quarterly report of a net loss of RM 1.67 million for 3 months period ended 31 March 2011. Investors would like to see a better earning and profit for the 1st quarter after the company projected earning and profit will grow by 10 times from Year 2010.
Furthermore, few analysts were saying that XOX lacked both financial and operation records since the company had been loss-making for the past 4 years.However, there are some analysts who still positive on the company’s outlook said that the profit taking activity by investors could be a knee-jerk reaction to XOX's first-quarter results.
“The worries are probably overplayed. (But) XOX's expenses to boost its brand awareness were necessary or else it will just lose market share to competitors.”
No comments:
Post a Comment