When eLandia International, Inc. (OTC:ELAN) announced that it was going private in less than two months, investors’ reaction was immediate. In what appears to be one of its final trading sessions, ELAN stock made a performance to remember.
Yesterday, ELAN gained a staggering 350% closing trade at a 52-week high of $0.45 per share. The volume reacted accordingly with 665 thousand shares changing hands, which also ended up being a twelve-month record, as well as 24 times higher than the average daily trading volume.
Evidently, the decision of Amper, S.A., which owns 85% of ELAN’s common stock, to take the company private had a smashing impact on the market. As it is, now that ELAN management has formally accepted the proposal, the next step is a colossal 1-for-150,000 reverse stock split. After the split, which is expected to come into effect in early 2012, the company will deregister its common stock and terminate its obligation to file reports with the SEC.
Ironically enough, ELAN’s bigger shareholders will be compensated to a lesser extent than smaller ones. At least, both will be able to start trading with Amper shares on the Madrid stock exchange.
Considering the company’s continual negative quarterly results, going private might prove healthy for the successful development of its business.
