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Small cap highlights: Ascent hit by retail investor hubris

Published: 17:20 02 Apr 2016 AEDT

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Shares in Ascent Resources PLC (LON:AST) were taken on a whirlwind this week after Cadogen Petroleum (LON:CAD) backed-out of an approach to buy the company.

In one of the more bizarre stories of the week, Cadogen, which only announced its interest in Ascent last week, decided a deal would no longer be worth it, after investors ploughed into Ascent’s shares.

Retail investor hubris saw Ascent’s shares skyrocket to 5.97p, a staggering 500% higher than the 0.93p closing price on March 23, the day before Ascent revealed Cadogan’s interest.

“This share price rise has taken Ascent’s enterprise value above a level that Cadogan was prepared to consider for a potential transaction,” Cadogan said.

Ascent came crashing back down to reality, losing the supposed ‘bid premium’ as it dropped around 70%, to 1.8p.

It represents something of a microcosm for the AIM 100, which has typically risen early before slipping back to remain practically flat. Over the course of the week, the index was just 0.03% lower.

While the small cap index ended slightly lower, there were still a number of other big risers - including Milestone Group (LON:MSG), which raised £540,000 through a premium priced placing, at 1p, earlier this week.

Ending the week at 0.7p the firm was up 68%.

Mining junior Ferrum Crescent (LON:FCR) was another small cap stand-out, after it gave chairman Justin Tooth the executive reins.

Tooth, formerly the key man at Ocean Equities and Pareto’s London arm, increases his influence as the company is acquiring an option over a Spanish lead-zinc project called Toral. The share was 63% higher this week to 0.16p, and at one point yesterday it more than doubled in value.

It wasn’t all good news, particularly in the mining sector, with Kolar Gold (LON:KGLD) one of the biggest fallers of the week.

The firm has decided to swap pick axes for pin-stripes, as it becomes the latest natural resources group to pivot into the ever emerging financial technology - or finntech - business. Shares dropped 48% to 1.4p.

Another of the week’s fallers was CDialogues (LON:CDOG). The mobile phone marketing specialist tumbled 38.3%, to 41p, after it warned annual results are set to fall below expectations.

The group blamed existing contracts generated less than expected for a slump underlying profit in the first quarter of 2016, and shares.

If warning profits may be lower is bad, actually confirming it is another sure-fire way to send a share price lower.

And that is the reason for the share prime slumps of electronics component maker Cap-XX (LON:CPX), oil explorer TomCo Energy (LON:TOM) and electric motor and power generator Turbo Power Systems (LON:TPS), which all reported a dip, slip or fall, of some kind.

Cap-XX reported higher interim losses as orders come in slower than expected, sending shares 31% lower, while full-year results from TomCo disappointed.

Turbo Power Systems saw fourth quarter revenue drop 12% from a year earlier while order intake was down 40%. Shares were 23% lower this week to 0.23p.

Capping off the misery was fluospar mine developer Tertiary Minerals (LON:TYM), which said it was facing challenges by animal welfare and environmental groups to its mining permit for the Storuman project in Sweden. As a result, its shares lost a quarter of their value to 1.55p.

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