AEM share price in trouble!
Lifetime Membership What an absolute disaster. Barely a month into 2024, AEM share price plunged by 19% following the shock announcement of a shortfall in inventories that would likely torpedo the Group’s profits for FY2023. The latest fiasco came barely 6 months after the outrageous revelation of the US$20 million arbitration settlement with Advantest. Needless to say, all hell broke loose for AEM share price. Question now is: how will AEM share price unravel in 2024?
Given the meltdown in AEM share price, investors have every right to demand accountability from the management for this awful mess. In my opinion, the current CEO should take responsibility and offers to resign. Under his tenure, Lattice Innovation was acquired and had attracted the US$20 million settlement with Advantest, causing a crisis of confidence in AEM share price for the large part of 2023. And now, the company is struggling to cope with the fallout from the inventory shortfall. To compound misery, the press releases over the past two weeks raised more questions than answers for investors.
As a shareholder of AEM Holdings, the inventory shortfall saga left me absolutely flabbergasted. Obviously, the incident indicated a lack of robust internal control as the management shared that “the initial investigation into this issue attributes the shortfall to human error in transactions with the Group’s ERP system during the migration of production to the Group’s Penang facility from Singapore”. As the CEO of AEM, shouldn’t there be accountability? After all, the fall of AEM share price caused many shareholders to lose money, not to mention the crisis of confidence engulfing AEM share price.
To make matters worse, the plunge in AEM share price caused AEM’s market capitalization to fall below the $1 billion mark. Short sellers wasted no time punishing AEM share price as short selling volume swelled. If investors noticed, short selling volume surged from 32300 on 12 January (Friday) to a mind-boggling 2.7 million on 15 January. This was because AEM management had released the press release announcing the inventories shortfall on 14 January, 6pm. The following day, short sellers basically sent AEM share price to the bottom of the abyss.
| Date | Short Selling Volume | Short selling value |
| 11 January | 98000 | $333000 |
| 12 January | 32300 | $110000 |
| 15 January | 2.7 million | $8.4 million |
| 16 January | 1.25 million | $3.9 million |
| 17 January | 1.8 million | $5.6 million |
| 18 January | 1.8 million | $5.5 million |
| 19 January | 1.5 million | $4.6 million |
| 22 January | 1.1 million | $3.2 million |
| 23 January | 90,1800 | $2.6 million |
| 24 January | 30,7600 | $888000 |
| 25 January | 94,0000 | $2.7 million |
| 26 January | 1.1 million | $3.2 million |
The next few weeks will be crucial for AEM share price as the Group’s full-year financial result for FY2023 will be announced on or before 28 February 2024. During this period, investors must be wondering if there would be any final dividend given the anticipated full-year financial losses. The Group has been dishing out dividends consistently since 2016.
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If the management decided to halt final dividend for FY2023, do expect another bout of chaos for AEM share price. It will also be a double whammy for those who entered this counter in early 2022 when AEM share price was trading at a high of $5.22. The sluggish form of AEM share price for the past two years had led inflicted negative capital gains for this group of investors.
Previously, I wrote that I was 200% convinced that AEM share price would rise from the ashes to hit another new high. Nonetheless, events unfolding in the past 6 months had somewhat shaken my conviction in this company. In this article, I will share my view on the outlook for AEM share price in 2024.
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. I am vested in this counter, so my views on AEM share price may be biased.
AEM share price to make or break in 2024?
Data shown that the short selling volume on AEM shares has subsided in recent days. However, it is too premature to claim that AEM share price is out of the woods. All eyes will be on the [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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