On December 6, Atos shares plummeted 98.54%, coinciding with a capital increase of €233 million and the upcoming issuance of 63 billion new shares. This unprecedented decline raised questions about the origin of the billions of shares available for sale. Despite the potential for short selling or trading algorithms, the situation suggests possible unequal treatment of shareholders, with concerns about insider advantages. Stakeholders are now seeking clarification from Atos, Euronext, and regulatory authorities.
Unraveling the Atos Controversy: What Happened on December 6?
On December 6, a significant upheaval transpired in the shares of Atos, a beleaguered IT firm that had just initiated a financial restructuring process, successfully raising €233 million through a capital increase. This event was overshadowed by an unexpected market anomaly.
Approximately 63 billion new shares are set to be issued to investors on December 10 and will be listed on Euronext the same day. However, just three trading days prior, the stock experienced a staggering drop of 98.54%, with trading volumes soaring to over 6 billion shares!
It’s critical to note that Atos currently has around 112 million shares in circulation, a fact corroborated by both ABC Bourse and Euronext, as evidenced by a screenshot from their official site:
Understanding the Market Dynamics: Why the Drop?
The situation became even more perplexing when trading resumed today, revealing an order book flooded with billions of shares available for sale, including orders for as much as 500 million shares. This raises an intriguing question: how can this be explained?
Having monitored market developments for nearly 25 years, the ABC Bourse editorial team has witnessed numerous capital increases, but this scenario is unprecedented. Typically, when a capital increase is aimed at rescuing a struggling company, a significant decline in stock value follows. Our analysis on December 5, prior to the dramatic drop, had already cautioned readers about potential risks associated with Atos, which had openly indicated the likelihood of substantial dilution. Yet, this turmoil unfolded well before the new shares were distributed.
While one might consider the possibility of short selling, this too seems implausible. Selling short requires borrowed shares, and given the immense volume, this raises further questions about the feasibility.
Another theory might suggest that trading algorithms executed numerous back-and-forth trades, but that doesn’t account for the orders of millions of shares that shouldn’t exist at this time.
The Mystery of the Billions of Shares
The pivotal question remains: where did these billions of shares originate? Clearly, individual investors were left reeling from the situation, witnessing their shares plummet to €0.0026 each after initially being priced at €0.0037, resulting in a staggering 30% loss.
Philippe Salle, the chairman and future CEO of Atos, who committed €9 million towards the recapitalization, is unlikely to be a source for these shares, as he is bound by a holding commitment.
It appears that certain participants in the recapitalization may have received shares ahead of the general public, allowing them to sell off before the broader market. This raises serious concerns about unequal treatment among shareholders, with individual investors potentially falling victim to this unfolding drama.
This incident could very well become another scandal associated with this troubled company. Stakeholders are now eagerly awaiting clarifications not only from Atos but also from Euronext and the AMF, the regulatory body tasked with safeguarding investor interests and ensuring fair treatment across the board.