Sosandar is an online women’s fashion retailer, aimed at the gap between the youthful ASOS and Boohoo and the ageing Bonmarché. It was a reverse takeover of Orogen plc, coming to the market in November 2017.
Background
It has had a volatile few years since it listed, with the issue price being at 15.1p per share. It hit a low of 11.2p in early 2018, before hitting a peak of above 47p in September that same year. It then trailed back down to 12.75p (what a rollercoaster) and has since doubled from those lows.
Sosandar shows just how quick the share price can change due to market sentiment. Sosandar was very popular amongst private investors, and billed as the next Boohoo on bulletin boards, and the £3m placing in October 2018 didn’t go down too well.
In hindsight, management should’ve filled their boots. The share price included a lot of froth, and the bad market conditions of Autumn 2018 did little for the stock’s fortunes. What most private investors fail to remember is that the prices of many AIM (and even FTSE stocks) are set pretty much by private investors. Institutions will buy in placings but it’s not often they will buy on the open market.
This means that the vast majority of players in the stock market arena and therefore liquidity is made up of ordinary punters. No doubt you will be aware of the advantage this gives you should you put in the hours and do your homework.
Nowhere is this more exemplified than Bidstack. The same broker note and forecasts were out in the market when the price was 4p, and again at 40p. Fundamentally, nothing had changed – but the market’s perception of the stock had changed tremendously.
Sosandar currently has more cash than it ever has previously
As I have mentioned previously, management are bad at fundraises. They wait until the coffers are empty before a whip round of the begging bowl, or in the case of Xeros Technology Group, they announce there will be another placing as they have just concluded the current one. Nothing kills market sentiment (and ultimately share price momentum) like highlighting negatives that don’t need to be highlighted.
The worst offenders are those who announce they’ll be completing a fundraise soon but have yet to…
