It's been a poor start to Friday's trading for the All Ordinaries Index (ASX: XAO) and most ASX All Ords shares. At the time of writing, the All Ords has slipped by 0.52%, putting the ASX in danger of ending its six-day winning streak. But let's talk about the Selfwealth Ltd (ASX: SWF) share price.
Selfwelath shares are on fire today. The brokerage company closed at 14 cents a share yesterday afternoon. But today, the Selfwealth share price opened at 17 cents and is currently going for 17.5 cents a share, up an extraordinary 25% from yesterday's close.
So what on earth is going on here that has seen Selfwealth add a quarter of its market capitalisation in just a few trading hours?
Well, there's a pretty simple explanation for this monstrous jump in value for the company. This morning, Selfwealth confirmed media speculation that it has received some takeover interest from fellow brokerage firm Stakeshop Pty Ltd, owner of the popular investing and brokerage platform Stake.
Selfwelath told investors that in "recent weeks", it had received a "confidential, non-binding, indicative proposal from Stake to acquire the Company by way of scheme of arrangement at a cash price of 17.5c a share".
The media release didn't beat around the bush when it came to this offer. Here's some of what Selfwealth said:
After careful assessment, the Board of Selfwealth ("Board") formed the view that Stake's incomplete and conditional proposal did not offer appropriate value to Selfwealth shareholders.
Accordingly, the Board decided it was not in the best interests of SelfWealth shareholders to engage in substantive discussions with Stake.
After its maiden profit in FY2023, the Board believes Selfwealth is in a solid financial position with $12.4 million of net cash as of 30 June 2023 and the Company has meaningful growth opportunities.
As such, it's no surprise to see the Selfwealth share price climbing to around the same valuation as what Stake was reportedly willing to fork out for the company on the markets today.
Although Selfwealth wasn't exactly ambiguous in its response today, it will be interesting to see if there are any new developments on this front in the coming weeks and months.
Selfwealth share price snapshot
Although it has been a phenomenal day for Selfwaelth shares today, zooming out, the picture gets a bit dimmer. Even after today's spike in value, the Selfwealth share price remains down 12.5% year to date, as well as down almost 24% over the past 12 months.
The company is also down more than 76% from its previous all-time high of around 75 cents a share that we saw back in late 2020, as you can see below:
