The emergence of BlackRock as a new substantial shareholder of Forge Group (ASX: FGE) has shed light on the rapid recovery of the mining services company, which rose for six consecutive trading days in late December.
Forge was forced to respond to two price queries from the ASX as its shares rose a total of 127.3% over the short period between December 20 and 31 (which included an incredible 54.6% one-day gain). Forge responded that it knew of no reason to explain the sudden spike in trading volume.
However, the sudden gains can now be explained as it was announced that BlackRock, the world's largest money manager, had traded a total of 2,774,011 Forge shares between December 17 and 31, as reported by The Australian Financial Review. It is now the 15th largest shareholder, holding roughly 5.3% of the company.
Despite the company's recent gains, the stock is still well below the value it entered a trading halt on November 1. Shares plunged from $4.18 to just 29c after the company revealed $127 million worth of write-downs on two power plant projects.
Shares have since recovered to today's price of $1.43, after it was announced that the company had been rewarded $40 million worth of contracts in North America. The company also received the go-ahead for more work at Gina Rinehart's Roy Hill iron ore mine in Western Australia.
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