Speculation or Truth ?
The mysterious out-of-proportion fall in Jaks' prices has prompted numerous speculations on manipulation and conspiracy. The unorthodox handling of warrant issue coincides with the abnormal results in Q3 2018 have raised questions on hidden agenda.
The recent strong recovery in Jaks' share price on the back of poor Q4 2018 results has prompted my interest to re-examine the merits of these non-academic speculations.
A cat that catches mouse is a good cat regardless whether it is white or black. A theory or speculation that correctly predicts the outcome is worthy of attention.
Jaks Resources - The great fall
There were a lot of article stories about Jaks when Mr Koon Yew Yin was the largest shareholder. Jaks' share price went up as high as RM1.84 in early 2018 during his presence. It has since tumbled to its lowest price of RM0.405 in the final month of 2018. What happened ?
Many "stories" have developed alone the way. Mostly revolve around margin calls, manipulation of results and prices, deliberate corporate exercises and conspiracy. Nothing fundamentally related ?
The only real unexpected one-time losses suffered by Jaks during this period was the RM25.5 millions bank guarantee performance payment to The Star. However, this only represents a loss per share of less than RM0.05. Could this possibly have caused a whopping drop of RM1.435 or 78% in Jaks' share price !? Most would disagree. So, was there an invisible hand at work ?
Before going further, I would like you to go through the following articles which were written during the period. The contents represent partial extraction from the articles. You are advised to read the full content of the articles.
The STORY behind - JAKS
Author: Keechia96 | Publish date:Sat, 28 Jul 2018, 06:16 PM
Author: Koon Yew Yin | Publish date:Fri, 24 Aug 2018, 07:29 AM
"As you can see from the company’s announcement, my wife Tan Kit Pheng and I have bought more than 150 million shares with margin finance. When the share price dropped, we have to sell some shares to meet margin call. We have sold a total of about 45 million shares quite rapidly, causing the price to plunge from Rm 1.54 to 97 sen within the last 3 months."
What you must know about JAKS
Author: puahtoh | Publish date:Mon, 17 Sep 2018, 10:55 PM
"The future earnings of JAKS is guaranteed with their IPP project in Vietnam, but I don’t suggest you to invest into it. WHY?!
The Boss always manipulate JAKS by adjusting the profits from Q to Q and leak out wrong figure to the institution and professionals. The Boss always want a really fluctuating price moving rather than one way growing up, so that he can sell at the peak and buy at the bottom.
An advise for those who invested or planning to invest in JAKS, prepare healthy cash flow and margin in your account. It is not a secret in the stock market industry about The Boss is a cleaver person. He is the only person that can fool TyKoon upside down. As can see from the chart below, TyKoon’s cost of buying is all above 1.0 and highest is >1.6. But base on recent margin call and TyKoon has force sell his margin at below 1.0. If you do a calculation, you will know how much TyKoon loss. And who will benefit from this?"
The Leaker - JAKS
Author: theleaker | Publish date:Sat, 1 Dec 2018, 12:02 AM
"I am writing again to tell everyone that I have warned you before.
Andy manipulates the earnings quarter by quarter.
Source from China, Q3'18 actually has more than RM10mil profits from Vietnam. However, they RECORDED a LOSS.
This is to kill those with margin calls.
Even with low PE, they still create panic selling, so that they can buy at cheaper price.
If not wrong, JAKS can't further drop, someone is trying his best to protect 0.45. Buy now because they will not let it drop further else they will lose control over it to someone. ~0.50 is a good price. Maybe within 3 months, Jaks will go up 100% from current price. "
Jaks - Green Light Now?
Author: david_tan | Publish date:Mon, 10 Dec 2018, 03:55 PM
"On 8 December 2018, Mr. Koon Yew Yin wrote that he had fully exit Jaks.
KYY’s exit from Jaks is like dark clouds in the sky being cleared. His presence in Jaks was a time bomb ticking away with Jaks’ owner and minority shareholders living at his mercy. With his financial might, more share acquisitions would push share prices up but share disposals by KYY (for profit taking or realisation of liquid cash for other investments or even margin call) would see share prices falling rapidly or even collapsing. Both scenarios have been evident in Jaks repeatedly during KYY's tenure.
Is KYY’s exit the pivot point for Jaks?"
JAKS “The Conspiracy Theory” Part (II)
Author: Sslee | Publish date:Tue, 11 Dec 2018, 07:56 AM
https://klse.i3investor.com/blogs/Sslee_blog/186081.jsp"Since I had wrote a blog on JAKS “The Conspiracy Theory” and people love conspiracy theory so please allow my imagination to run wild and give you the whole story on this conspiracy theory.
One upon a time there was this one man super fund Mr. K and with the help of his capable portfolio manager Mr. O had manage to earn super profit from investment in these stocks (Latitude, VS and Liihen) The fund size is now a few hundred million. And because Mr. K is a well known opposition supporter (MCA enemy Number 1) and know for his big ego. Thus he become a political and a pump and dump insider/syndicate target. An elaborate conspiracy/pit fall was set up to lure Mr. K to the trap. Agents Q was assigned to PLP Mr. K big ego and arranged Mr. K to meet the insider to confirm everything written by Agent Q’s son RB report were true. Mr. K then pumped in his fund to buy JAKS share which in fact were shares sold by the insider/syndicate. The insider then purposely on 1/3/2017 reported a poor q4 2016 of 32 million losses to spook the market in order to collect back the share cheaply, to their surprise Mr. K was pumping in more fund to support the price and even wrote many articles to promote JAKS. (By now Mr. K was so hoodwinked (kena jampi) and totally in love with JAKS, he even gone against Mr. O repeat advice and abandoned his own K’s golden rule and come out with his pivotal moment and exception proves the rule theory) Insider/syndicate then manipulates the quarterly result for Mr. K to pump and they dump for many rounds as what Agent Q had told (profited again and again). In between syndicate was feeding Mr. K with manipulated information/ fake call example I received this WhatsApp from Mr. K (One Institution investor want to buy 10 million JAKS from me. That’s why you can see big buyers at RM 1.54 yesterday) Agent Q even invited Mr. C to help promote JAKS which Mr. C had confided his regret and say sorry to Mr. K and i3.
Finally Mr. K wake up from (kena jampi) after someone must have prayed very hard at temple to break the evil spell and talk sense into him. Mr. K now wake up and know that he had been taken for a ride for so long makes his empire strike back, selling JAKS stock slowly for the insider/syndicate to collect and then boom the big day Nov 30 2018 (129 million traded price range 0.46-0.555) Mr. K, Mr. I and many more traders were running for the exit door. The hunter becomes the hunted, insider/syndicate now have so many JAKS in hand at initial price of 80cents (and the commitment/obligation to subscribe for the warrant) and Agent Q had even convince them to average down their cost by buying more at 50 cents as he was very confidents insider will report a good Q4 to lure Mr. K to push up the price for them to dump again. Will insider/syndicate cut loss now or can Agent Q convince some other big water fish (Sohai) to push up the price for syndicate to dump? Time will tell and this time when the syndicate cut loss they will also cut off the Agent Q kuku bird for real."
Jaks - Winner Andy Ang
Author: david_tan | Publish date:Thu, 13 Dec 2018, 07:23 PM
"The clear winner of this warrant issuance exercise is CEO Andy Ang. I am of the opinion that this warrant issuance exercise is in no way a true fund raising exercise. It is an exercise to serve AA's personal purposes.
#1. AA had successfully forced KYY to exit Jaks
#2. AA had cleverly timed this warrant issuance exercise expecting KYY to sell his shares in the open market thus driving Jaks' share price down. AA needed this share price fall to happen to ensure a low subscription of the warrants. And indeed he had achieved that with a subscription rate of 37.52%.
#3. Assuming full conversion of the warrants in the future, AA will increase his percentage shareholding at a relatively cheap entry cost of 25 sen per share."
Jaks Resources - My opinion
Author: DK66 | Publish date:Mon, 11 Feb 2019, 12:56 AM
"The most recent decision by the LTIP committee to award a huge portion of RSP was not well received too but it didn’t cause the share price to fall. Why?
Conclusion : The timing of the grant at current low price regime benefits the company in term of lower charges to P&L. It benefits the employees in the form of lower tax liabilities.
Why has Andy decided to grant a very substantial portion of RSP with just 8 days SINGLE vesting period? ..... logical thinking … Is Andy expecting the share price to continue moving higher from hereon thus taking advantage of current low price to minimize his tax payments on his RSP? "
What have caused the great fall ?
Some believed the insiders have manipulated stock fluctuations and profited from Mr KYY's trading losses.
Mr KYY reckoned his margin calls have caused the shares to fall from RM1.54 to RM0.97 within 3 months.
One even brought up the conspiracy story which normally only happens in movies.
3 articles were written using new IDs created for the sole purpose of writing one article. Two of which intended to warn investors of manipulative acts of insiders, whilst one predicted the end of fall and potential 100% rise in 3 month.
Jaks has attracted more writings on insiders manipulations and conspiracy than other stocks in i3 forum. Why ? Too obvious ?
Some of these articles has correctly warned the downfall and spotted the upturn in prices. Again too obvious ?
Are these speculations credible ?
There is no way to be absolutely sure about what happened behind the scenes. Most of these articles tried to provide the most logical explaination for the fall, whilst 2 articles tried to warn investors of the danger ahead.
None of these articles have linked the great fall to Jaks' fundamentals.
Sifu Icon8888 remains confident in Jaks' fundamental despite falling prices. In fact, he took the opportunity to make his early 2019 sailang call on Jaks-wb.
(Icon) Jaks Resources (7) - Jaks WB Is My 2019 Sailang Stock
Even Mr KYY, after exit, did not changed his views on Jaks' vietnam IPP.
I have written 3 articles explaining the rationales for the huge potential I see in Jaks' vietnam IPP.
Therefore, in such circumstances, large short term price deviation from fundamentals maybe otherwise better explained with non-academic rationales or speculations.
Most of these articles suggested "mission accomplished" and correctly predicted price recovery.
Based on their respective rationales and views, David_tan correctly saw Mr KYY's exit as the pivotal point while Theleaker correctly called a potential 100% in 3 months. I have accurately marked the RSP grant as the turning point in Jaks' share price.
So, what will be the next untold story ? The Great Leap ?
Poor results in Q3 2018 was one of the reasons for the great fall.
However, Jaks' price has recovered more than 100% from RM0.405 to RM0.83 after the company reported a worst quarterly results in 2018.
Why a worsening Q4 2018 results has a reversal effect on the price trend ? Another untold story of "Invisible push" ? Lets wait for new articles to unfold the story.
I have written 3 articles on the huge potential in Jaks' vietnam IPP.
1. Understanding Jaks Hai Duong thermal power plant in Vietnam
https://klse.i3investor.com/blogs/Jaks%20resources/189891.jsp2. Jaks Resources - My Opinion
3. Jaks Resources in 2019
I m always confident that the Vietnam IPP will be a game changer for Jaks. It will be a great leap for Jaks to the next level of recognition in KLSE.
Given the bright prospects and the strong price recovery, there is a high possibility that the next chapter on Jaks will be "Jaks Resources - The Great Leap" driven by strong fundamentals rather than the invisible hands.
Conclusion : Whatever the cause of the great fall, it seems to have accomplished its objectives as suggested by the various articles. This is evident by the strong price recovery. The Vietnam IPP will be the driving force behind The Great Leap of Jaks Resources.
Thanks for reading the Story.