Trackwise Designs (LON: TWD) shares are down 62% this morning as they announce that their accounts will not be on time, there's going to be a suspension of the shares from Monday morning as a result. This is the time of year when companies that use the calendar year as their fiscal one can run into such problems - the 6 month limit on filing accounts. This is also when there's a possibility of an interesting little speculation. Our example of it working is Altyn Gold which we recommended. They were doing to be late with their accounts, everything else looked fine though. So, the suspension news knocked 20% of the price, the relisting added 20% a week later. A 20% profit in a week, very nice and thank you.
But this does depend upon it being just and only the suspension causing the drop in hte share price. If it's that the accounts are late because there's some gremlin in them then the relisting could be at some substantially lower price. Which wouldn't be nice if we'd bought on the suspension fall. We've thought about this this morning already with respect to Caspian Sunrise and dedicated that, well, no. Not that we know of course, but just, well, there might be some other problems in there.
Trackwise designs share price from London Stock ExchangeHere's what worries us here at Trackwise: “On 30 March 2023, the Company announced that it expected a delay in the manufacture and deliveries of a fixed quantity of flexible printed circuit boards (the Parts to the EV OEM), whilst the EV OEM undertakes a redesign and validation of the Parts to meet their revised design requirements. The Change Control procedure within the Commercial Order was initiated, including the impact upon the Parts price and production completion, with a Change Control Note ("CCN") issued to the EV OEM on 19 April 2023. The Company has reiterated to the EV OEM that it is in material breach of the Commercial Order as they have failed to engage with the Company in good faith to conclude the CCN. The Company has repeated its message to the EV OEM that it remains committed to agreeing the CCN in good faith.”
They're having a grand, screaming, fight with a major customer. A fight which may or may not work out OK. That's another risk, over and above the accounts being late. Sure, it might all be resolved and everyone comes out happy but the speculation of it being only and alone the late accounts causing the 64% drop seems not to be there. So, as a speculation on it purely being that the accounts are late - rather than being late and bad - we'd not touch it with the proverbial bargepole.