noble group faces a bear onslaught and brings forward its quarterly earnings report 954652015

The stock of Noble Group Limited (SGX:N21) appears to have come in for a thrashing from determined bears, shrewdly timed with the onset of the two-week blackout period before its scheduled declaration of second-quarter earnings on August 13 – a period during which the company and senior management are not allowed to make share purchases.

It may be noted that in recent weeks the company has spent over $130 million in buybacks to prop up its share price and to protect against a bear onslaught following the controversies raised by research firm Iceberg, later joined by Muddy Waters and ex-investment banker Michael Dee.

The stock has lost over 60% since Iceberg raised questions regarding Noble’s accounting practices. In terms of market capitalisation that means a loss of nearly $5 billion.

On Monday, the stock closed at $0.455, down 12.5%, at a seven-year low. This followed another 12% sell-off on Friday, when the SGX issued an inquiry to the company, and later slapped the stock with a “trade with caution” notice.

The developments appear to have spooked investors, and what might really have had bulls stampeding for the exits was a rumour on Monday that Noble would be dropped from the Straits Times Index when it is reviewed in September.

Another rumour floated that the company may not have the wherewithal to meet its US$735 million bond redemption due on August 4.

In a bid to calm sentiments, the Noble Group said Monday (August 3) that it held sufficient cash and liquidity to fund its bond redemption and operations and still have over US$1 billion leftover, according to Business Times. "Noble has sufficient cash and liquidity to meet its obligations and operate its businesses,'' it said. "In addition to this significant readily available cash, we would also like to provide the following update in terms of our liquidity and available credit as of the end of July: namely, we currently have around US$15 billion in bank lines.''

In a further clarification on Monday, Noble Group said it was not aware of any significant business issues that could have triggered the recent decline in its share price, but alleged that interested parties were spreading misleading information with a few to manipulate it downwards.

The company said it will answer all these allegations when it publishes its second-quarter results, a report from independent auditors PwC and through presentations on its forthcoming Investor Day.

The company also took the unexpected step of bringing forward the publication of its quarterly results.

"In order to allow all market participants to have the full benefit of this key information and to address the allegations as soon as possible, the Board of Directors has decided to bring forward the publication of the Q2 results, and the PWC report findings, to Monday, August 10th."