The deluge of share trading that battered emerging platinum-miner Eland Platinum's (Eland's) stock on Tuesday could be attributed to the high proportion of South African hedge fund investors owning shares in the company, which generally trade on speculation rather than fact, an official at Nedbank Capital said on Tuesday night.
And when reports came out on Monday, saying that potential suitors for Eland had walked away because of the company's high share price, these traders jumped ship, causing the stock to plunge by 25,7% at one point on Tuesday.
Eland had put out a cautionary on April 22 saying that it was in talks that could affect its share price. It has repeatedly said since then that it was still under cautionary.
Hypothetically, if it were in talks for a possible takeover, and the buyer walked away, Eland would have to put up a notice on the JSE as soon afterward as possible, withdrawing the cautionary announcement according to the bourse's rules.
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