Steniel jumps 388% in first day of trading

Steniel Manufacturing [STN 1.27, up 388.5%; 100% avgVol] [link] saw its share price close up 388% to P1.27/share in its first day of trading since 2006. STN’s path to P1.27 was anything but smooth, however, as speculators jumped in and out of the stock unhindered by the PSE’s regular trading band restrictions. The first trades at the open crossed at P1.20/share, which was already a 360% increase, but things escalated rather quickly. By 9:37, trades were crossing at P1.92/share, a 638% increase from 2006 and a 60% increase from its 9:30 price. But that’s when the winds changed, and the price tanked 41% from P1.92 to around P1.12 in just 20 minutes. The STN bulls fought back, pushing the price back up to the P1.45 level, where it remained for most of the morning until just before 12, when selling pressure pushed the price back into the P1.30s, leading to an intra-day low of P1.08/share. Some last-minute buying pushed the price back up into the P1.20s and it closed the day at P1.27. Over P20 million worth of shares changed hands on the day through 942 trades, which is roughly equivalent to 1% of STN’s outstanding shares.

MB bottom-line: The crypto trader in me loves every second of this, but the market advocate in me is bracing for the emails that I’ll receive over the next three months from people who bought near the peak asking what to do with their underwater bags. I understand that there’s a significant amount of “price discovery” that needs to happen for a stock that hasn’t traded since Cars first debuted in theaters, but there must be a better way than this. The exchange diligently applies trading bands to every other stock in 99.9% of all other circumstances to dump cold water on irrational pumps and to give scared traders a chance to breathe in the midst of massive dumps. What’s the harm if STN opened with a normal trading band applied to its 2006 price of P0.26/share? So what if the stock ceilings 5 or 6 times in a row? Wouldn’t it be a better process of price discovery to allow the conversation to evolve over time as traders refamiliarize themselves with STN’s business model and all of the changes (both positive and negative) that have happened to the company? I’ll never understand the willingness to allow bandless trading in these niche situations when the exchange tries so hard to avoid this kind of thing at all other times.

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