January 19, 2014

Bloomberrygoes on voluntary trading halt

In a letter to the Exchange, Bloomberry Resorts Corp (BLOOM, Buy) has requested to go on a voluntary trading suspension on 16-24 Jan 2014 in light of the sale by Global Gaming Phils LLC (GGAM) of BLOOM shares equivalent to 8.7% of the company‟s total outstanding shares.

To recall, BLOOM has terminated its management services agreement with GGAM and the case is currently undergoing arbitration proceedings. BLOOM said that the GGAM shares included in the placement are subject to a counterclaim by BLOOM. While the company has assured that buyers of the concerned shares shall not be dragged into the arbitration proceedings, it has yet to ascertain the validity of the sale.

Our take: Until the issues on the claims and counterclaims involving such shares are settled, this will create an overhang on BLOOM shares and can weigh on the share price. This is notwithstanding the improvements in BLOOM‟s operations and profitability. – WealthSec