Jobstreet active even without core business

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KUALA LUMPUR (Dec 30): Jobstreet Corporation Bhd’s shares were actively traded in the morning session on Tuesday, emerging among the most active counters on Bursa Malaysia.

At midday, Jobstreet was traded at 53.5 sen with some 55.53 million shares done, with no change in its price. It was one of the top three most active counters on the local bourse.

Alliance Investment Bank remisier Raymond Foo said the large volume was unlikely from retail investors. Instead, he sees it as being contributed by shares changing hands among major shareholders.

“Another possibility is that some investors may have got to know insiders' news,” he said.

He said some investors might have knowledge of the kind of new core business that would be injected into the company or if new substantial shareholders would be joining the company.

Jobstreet closed at 53.5 sen yesterday, up 37.2%. Its share price shot up as much as 15 sen or 38.5% yesterday to 54 sen from 39 sen last Friday.

The Edge Financial Daily had reported that JobStreet’s share price shot up as much as 38.5% yesterday, leaving many to wonder why it is drawing investors — some 71.83 million of its shares changed hands at yesterday’s closing — even when it has no core business to speak of.

As at end-September, the company’s net assets stood at RM254.6 million. It also has a clean balance sheet with zero borrowings.

After completing the disposal of its online job portal to Seek Asia Investments Pte Ltd for RM1.89 billion on Nov 20, JobStreet had distributed almost all proceeds of the disposal as a special cash dividend to shareholders at RM2.65 per share.

This leaves it with a net cash position of RM46.3 million, which translates into a net cash per share of 6.6 sen, albeit without a core business.

Hence, it will be classified as an “affected listed issuer” as set out under Practice Note 17 (PN17) of Bursa Malaysia’s listing requirements, and will need to formulate a regularisation plan.

However, the report said that options are open for JobStreet to make value-accretive acquisitions, as long as it is outside the job portal industry, from which it is prohibited for the next two years.

The report also pointed out Jobstreet's equity-accounted investments in associates include Innity Corp Bhd, Taiwan Stock Exchange-listed 104 Corp, and a jointly-controlled entity, JobStreet Recruitment (Thailand) Co Ltd.

The stock was also highlighted as The Edge Research’s Stocks with Momentum last week.