Altyngold (LON: ALTN) is currently one of those little speculations which require immediate decision making plus a desire to take on a great deal of risk. We are not recommending this - we do not recommend trades s a matter of course. But it is worth laying out what the options here are. The way matters are currently being presented the risk is for about a week. That is though a locked in risk, this is an all or nothing trade.
The problem at Altyngold is that they have to produce their accounts by today. Their auditor is stating that they'll not be able to finish them, sign them off, in time for that to be done. So, ALTN has - rightly - asked for the shares to be suspended. This will take effect Tuesday morning (Monday the London markets are closed). That means trade can only be done today.
Hmm, so, how risky is this delay to the accounts? That's what the problem is here.
Altyngold share price from London Stock Exchange
So, the price drops 22% as a result of the imminent suspension. But we are told - told, of course - that the suspension is likely to be just for a week. The auditors also say they've no issues here, it's just they'll not be ready. Finally, we've the unaudited accounts to have a look at. Which tell us - unaudited of course - that there's a $13 million profit made on mining gold. 48 cents (US$) per share earnings. The market caps some £40 million (note sterling) and the profits $13 million (note US$) and that seems, well, that seems pretty good actually.
So, that's the bet really. If the accounts are signed off next week, if the shares are relisted at the end of next week, and also there are no gremlins in the audit nor delays to the relisting, we'd expect to see a nice little move upwards in Altyngold when that happens. Certainly a recovery of this 22% drop and possibly quite a bit more than that.
On the other hand there might be a deeper reason for the audit delay and note that with the suspension we'd not be able to get out of any position entered into.
Again, we are not recommending anything here, just pointing out the obvious. There's a speculation that the problems are trivia and that a purchase now will pay dividends upon relisting. But with the obvious and high risk that if there is something seriously wrong then it won't be possible to move out of the position.
