Stock of Orchid Chemicals has been down 63% from its January 8 highs. The management has sold its 7% stake as its margin calls got triggered. The management had earlier hiked stake to 24% from 17%. It had no cash and hence had to liquidate its position. The company’s management stake is now back to 17%. The company does not have plans to sell further shares as margin call positions have been cleared.
In a different episode yesterday, Bear Stearns had transferred ten lakh shares to Credit Suisse & Morgan Stanley. The volumes were at 1.2 crore shares versus 10-day average of about 4.5 lakh shares. The delivery volumes are at 32% versus its 10-day average of 44%.
Currently, Orchid Chemicals’s stock is currently trading at five times its FY09e PE. It was trading at 13 times FY09e PE on January 8.
Source : MoneyControl
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