Shekel Brainweigh Ltd to Voluntarily Delist from ASX: Key Details and Implications
SBW (SBW) Share Update November 2024 Monday 18th
Shekel Brainweigh Ltd Announces Voluntary Delisting from ASX
Global weighing technology firm Shekel Brainweigh Ltd has announced its intention to voluntarily delist from the Australian Securities Exchange (ASX), citing several strategic reasons. This decision marks a significant shift in the company's approach to managing its market presence and operational focus.
Instant Summary:
- Shekel Brainweigh Ltd to delist from ASX, pending shareholder approval.
- Current share price at A$0.04, considered undervalued by the Board.
- Low liquidity with median daily trading volume at zero for 157 days.
- Delisting aims to reduce costs and improve operational focus.
- Shareholders to vote on delisting on 7 January 2025.
Reasons for Delisting
Shekel Brainweigh Ltd has submitted a formal application to delist from the ASX, a move that has been confirmed by the ASX pending certain conditions. The company's Board of Directors believes that the current trading price of its shares does not reflect the company's inherent value, especially given recent technological advancements and strategic partnerships in the U.S. and EU.
Additionally, the company has faced significant liquidity issues, with an average daily trading volume of only 25,445 shares and zero trading on 157 days between September 2023 and September 2024. This lack of liquidity has contributed to the undervaluation of the company's shares.
Financial and Strategic Considerations
Shekel has also struggled with fundraising in Australia, finding limited interest from institutional and retail investors. The costs associated with maintaining an ASX listing are approximately A$0.84 million annually, which the Board believes could be better allocated towards business development if the company were unlisted.
The Board believes that delisting will allow the company greater flexibility in pursuing strategic opportunities and reduce the administrative burden on management.
Conditions and Timeline
The delisting is contingent upon shareholder approval, which will be sought at a general meeting on 7 January 2025. If approved, shares will be suspended from trading on 6 February 2025, with the official delisting date set for 11 February 2025.
The delisting of Shekel Brainweigh Ltd is expected to have a mixed impact on the company's stock and the broader market. While the move may initially cause uncertainty among investors, the Board believes that it will ultimately allow the company to focus more effectively on its core operations and strategic growth. The removal of ASX listing costs and administrative burdens could improve the company's financial health and operational efficiency.
Investor Reaction:
Analysts may have mixed reactions to the delisting. Some may view it as a necessary step for Shekel to realize its true value and pursue growth opportunities, while others might be concerned about the lack of market liquidity and transparency post-delisting. Investors are advised to consider their positions carefully and consult with financial advisors.
Conclusion:
Shekel Brainweigh Ltd's decision to delist from the ASX reflects a strategic shift aimed at improving valuation and operational focus. Investors should closely monitor the upcoming shareholder vote and consider the implications of the delisting on their investment strategies. Staying informed and consulting with financial advisors will be crucial during this transition period.