Avalon Holdings slump after 5 day surge

New Concept Energy

31/07/2018 22:18

By Sinéad Carew
    July 31 (Reuters) - Shares in waste management provider
Avalon Holdings Corp  AWX.A  posted a second day of losses on
Tuesday, erasing most of a 500 percent gain in the five previous
trading sessions, as it became the latest of three companies to
register volatile swings around the time ownership disclosures
were filed by the same investor.
    Avalon stock soared to an intra-day high of $20.20 on Monday
before closing sharply lower, after rallying from $3.35 at the
close last Tuesday. Avalon, which also owns golf courses, fell
39.4 percent to $3.67 on Tuesday.
    The companies, Avalon, Mer Telemanagement Solutions  MTSL.O 
and New Concept Energy  GBR.A  have all seen their shares soar
and sink in a few days during which a Bahamas-based broker
dealer MintBroker International disclosed holdings in each of
the companies. 
    On Tuesday Bloomberg published a story about the three
companies and their common shareholder MintBroker. According to
the report, Guy Gentile, a trader who founded MintBroker in
2011, started cooperating with the FBI in 2012 after the FBI
said he orchestrated two "pump-and-dump" schemes that caused
investors to lose $17 mln [https://bloom.bg/2LEEfGx]     
    Adam Ford, a lawyer at Ford O' Brien LLP in New York,
confirmed his client had cooperated with the FBI but said he has
always denied he committed any crime. 
     Starting on July 24 trading in the stock has surged
dramatically. After closing at $2.20 on July 23 it climbed for
four days before it started its descent after hitting record
high of $20.20 on Monday July 30.  urn:newsml:reuters.com:*:nL1N1UQ1CX
    About 3.9 million Avalon shares changed hands on Tuesday,
well above its daily average of roughly 3,000 before the recent
activity spike, according to Reuters data
    MintBroker on Fri July 27 filed a Form 3 with the Securities
and Exchange Commission disclosing ownership of 1.9 mln shares
in Avalon, or roughly half its 3.8 mln shares outstanding,
according to the latest data from Thomson Reuters. 
    After market close on Monday Avalon issued a release saying
it was "unaware of any information or events that would warrant
the stock activity over the last five days other than the
purchases disclosed in the Form 3" filed by MintBroker. It said
it was not affiliated with MintBroker. 
    Avalon also said its Chief Executive Ronald Klingle holds
about 67 pct of Avalon's voting power and told the company he
has no present plans to divest any of his holdings.  urn:newsml:reuters.com:*:nPn1pCMp8a
    On June 29 MintBroker disclosed a New Concept Energy stake
of 1.0 million, or about half the company's shares according to
Reuters data. Trading in New Concept spiked ahead of the
disclosure and also on July 2, from $1.39 on June 27 to a $12.75
peak on July 2, but then slumped back to $4.11 on July 3, the
same day that MintBroker said it sold its holdings. 
    On July 12 MintBroker disclosed it had increased its stake
in Mer Telemanagement by 147,716 shares on July 11 to give it a
total stake of 446,911 shares and on the same day it said it
sold all 446,911 shares in the company for $3.60. The stock fell
19.8 percent to $2.19 on July 11 and fell another 27.9 percent
on July 12 to $1.58, the day of the disclosure. 
    Before Mer Telemanagement's trading surge, which kicked off
with a 145.95 percent gain on July 10 to $2.73, the stock had
closed at $1.11 on July 9. Shares in Mer Telemanagement closed
down 6.3 percent at $2.08 on Tuesday.      
    Regarding MintBroker's trading in shares of Avalon, New
Concept and Mer Telemanagement Ford said: "It's wildly
inappropriate for anyone to suggest this trading activity is in
any way improper." 
    "He (Gentile) was buying and selling shares of these
companies on the open market like any other trader trading any
other stock," Ford said.     

 (Reporting By Sinéad Carew)
 ((sinead.carew@thomsonreuters.com; +1 (646) 223 6186; Reuters
Messaging: sinead.carew.thomsonreuters.com@reuters.net))