AMTE Power (LON: AMTE) shares are up 105% this morning. Which is really rather a surprise, as the update is rather a repeat of their earlier warning, that they might go bust. Also, that the decision date is closer now than it was then. Why this should double a share price is one of those mysteries we are not privy to, sorry about that.
As we said about AMTE Power: “AMTE Power (LON: AMTE) shares are 71% down in London this morning. The reason for this is the announcement that they may well be going bust. In fact, pretty much will go bust unless they're able to conjure up some more capital in the next four weeks. Further, if they do then the prospect of there being any recovery for investors is “uncertain”. Translated that means that bust would be bust.” We also went on to suggest that perhaps they should have organised the rescue rights issue a little earlier: “Two thoughts do occur to us. The first is that perhaps AMTE Power should have started organising a rights issue a few weeks back. Announcing one wouldn't have trashed the share price by more than has already happen - we guess not at least - and gaining more capital from shareholders would have solved the problem.” Oh well, that didn;t happen, but we think that's where the strategic error was.
AMTE Power share price from London Stock Exchange
Which brings us to today's announcement: “However, given the passage of time since the Announcement, it is now considering all credible options, including a sale of the Company's business, in relation to which FRP Corporate Finance is advising, in order to act in the best interest of all stakeholders in the Company. At this stage, the Company is not actively pursuing a sale of the Company itself. Whilst active discussions are ongoing with various parties, there can be no certainty of the outcome of these discussions. Accordingly, in light of AMTE Power's reducing cash position, should the Company be unable to secure additional funding within no less than the next three weeks, the prospects for recovery of value, if any, by shareholders would be uncertain.”
It's possible that people have misunderstood that. Sale of the business would not - the management think - lead to a recovery by shareholders. So, even if that happens it's difficult to see why there might be a 105% increase in the AMTE stock price. Just one of those mysteries we guess.
