(Bloomberg) -- A small Danish property company started 2017 as the biggest winner on the Copenhagen stock market, surging as much as 930 percent since the end of last year. But there's a problem: Management has no idea why and is trying to talk sense to investors.
Victoria Properties A/S, which had focused on German real estate, on Monday had to remind the market that its equity is gone, responding to a surge in its share price as big as 195 percent in early trading.
“The management in Victoria Properties wants to make clear that there has been no change in Victoria Properties' economic conditions and that no plans have been disclosed regarding the company's future strategy,” Chief Executive Officer Rasmus Bundgaard said in the stock-exchange announcement. “The company's equity is therefore still equal to about zero kroner.”
The announcement seemed to encourage some afterthought among traders, with Victoria's shares first paring gains and then falling about 23 percent. By around 3:40 p.m. local time, the shares were down 4.8 percent at 10 kroner. That values the penny stock at 46.6 million kroner ($6.7 million), after its market value grew by 232 percent this year.
Victoria's shares had fallen for six straight calendar years before 2017, so even after January's stunning gains, the company is still worth about 98 percent less than at its 2006 peak, just before Denmark's property bubble burst.
The last time the company issued stock-exchange announcements was on Dec. 29, when majority owner Euroinvestor.com sold its entire 64.95 percent stake to three different companies, including one controlled by Victoria's CEO.
To contact the reporter on this story: Christian Wienberg in Copenhagen at cwienberg@bloomberg.net.
To contact the editor responsible for this story: Tasneem Hanfi Brögger at tbrogger@bloomberg.net.
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