Lifetime Membership What a devastating meltdown. From a high of $6.30 in July 2021, Nanofilm share price (SGX: MZH) plunged more than 50% to reach the current low of $3.05. The capitulation of Nanofilm share price caught the attention of the investment community. Should Nanofilm investors run for their lives?
A Lifetime Member has written in to seek my views on this counter. Henceforth, I will share my insights on the two potential factors that could have knocked the wind out of Nanofilm share price.
At the rate of correction, Nanofilm share price may reach the IPO price of $2.59. This is especially so if the upcoming full-year failed to meet investors’ expectations. When Nanofilm got listed on 30 October 2020, there was much hype among Singapore investment community due to the dearth of billion-dollar technology firm listings in SGX in recent years.
Indeed, Nanofilm share price made a strong start with an opening price of $2.77 and an intra-day high of $3.02. With solid support from a stellar group of institutional investors like Temasek Holdings, AIA, Credit Suisse, investing in this company seems like a no-brainer. Admittedly, I was tempted to enter this counter but stopped short of doing so because of my personal policy of not investing in a company that just got listed within the first five years. The explosive meltdown of Nanofilm share price vindicated my investment principle.
Just like retail investors, institutional investors also want to make money from IPOs. However, the key difference between these two groups of investors is that retail investors make money at the point of selling whereas big boys often make money at the point of buying. For this reason, retail investors would often buy high and sell high while big boys would buy low and sell high. Now, how does this relate to the current state of Nanofilm share price if you may ask? Below, I would share a deeper level of insight to illustrate my point.
According to the Nanofilm prospectus, there were a group of pre-IPO investors and convertible note holders. At the point of IPO, the largest pre-IPO investor was former CEO Lee Liang Huang, who held 15,183,840 shares at $0.0659 and 1,610,000 shares at $0.391. This means that even if Mr Lee is to sell all his shares at current Nanofilm share price, he would be laughing all the way to the bank. In contrast, retail investors who bought when Nanofilm share price peaked last year would have lost their pants.
As for Temasek Holdings, it had converted its convertible notes through Vanda 1 Investments Pte Ltd and Orchid 2 Investments Pte Ltd. During IPO, it held 18.1 million shares at $0.93. Again, Temasek Holdings is also another big winner even at today’s Nanofilm share price. Due to the presence of cornerstone and pre-IPO investors, I would usually avoid investing in companies which got listed within the first five years. You never know when these group of players would cash out and cause volatility to the share price.
Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested in Nanofilm shares currently. Whether Nanofilm share price will surge or collapse has no impact on me. Thus, this article is not meant to induce readers to make any form of investment decisions.
Nanofilm share price under heavy shelling
We are only three weeks into 2022 and yet Nanofilm share price has already collapsed by a whopping 21%! Looking at data extracted from SGX, the turning points for Nanofilm share price took place on [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]
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