The R4.3-billion in pension fund money that the Public Investment Corp (PIC) controversially pumped into the Iqbal Survé-linked Ayo Technology Solutions is proving to be one of history’s worst-ever investments.
This is after Ayo’s share price collapsed by 99.1% on Tuesday – falling from R3.50 to 3c in a single trade of 100 shares – giving the company a market valuation (calculated by multiplying its share price by the number of shares in issue) of just R10.3-million.
The PIC originally subscribed for shares in Ayo at a valuation of R43/share, effectively giving the PIC a 29% stake in the firm, the Daily Maverick reported in 2019. Using Tuesday’s share price of 3c, the PIC’s investment has therefore shrunk to less than R3-million, a collapse of 99.99%.
While the share price of the lightly traded Ayo could bounce back equally as quickly as it fell, the highest bid in the market at the time of writing was just 16c (with the best offer on the sell side at R3.49). Yet even if the price collapse on Tuesday is reversed, it follows years of erosion in the company’s value.
Tuesday’s price plunge comes three months after the JSE imposed a rare censure on two former Ayo directors, publicly berating non-executives Mbuso Khoza and Telang Ntsasa, who served on Ayo’s audit and risk committee.
The bourse barred both Khoza and Ntsasa from being directors or officers of any listed company for five years due to their failure to comply with important provisions of the listings requirements and for failing to fulfil their duties and responsibilities as directors and audit committee members of Ayo “with the necessary due care and skill”.
The public censure of the two former directors follows the JSE’s decision in 2020 to fine Ayo R6.5-million for publishing “false and misleading” financial results shortly after its December 2017 listing, putting it in breach of the listings requirements. – © 2022 NewsCentral Media