Attempts by fast-growing legal entity Quindell Portfolio to ease investors’ concerns appear to have had little effect after a second day of tumbling share prices.
The company released a statement yesterday after its shares on the London AIM stock market fell by 28%.
The downward trend continued today with more than 21% wiped off the price to leave shares valued at 5.75p by 3pm.
The company also appears to have changed its social media policy, with chief executive Rob Terry tweeting today that ‘following shareholder meetings this week Quindell shall no longer be using this form of communication’.
Quindell released a statement late yesterday afternoon after investor concerns about a £13.2m equity swap arrangement entered into in December to finance the acquisition of Accident Advice Helpline.
Quindell said there was ‘no valid reason’ for the recent share price decline and that the equity swap accounted for a ‘small part’ of the group.
The statement added: ‘The board wishes to clarify that further to its recently reported record results, the company has a strong balance sheet and continues to trade profitably with significant traction in the insurance sector.’
Quindell’s acquisition strategy has taken the legal sector by surprise. It began in January 2012 with the acquisition of Liverpool personal injury firm Silverbeck Rymer in a £19.3 deal, with £10.25m paid up-front in cash.
The group added further law firms and other businesses in the sector and posted pre-tax profits of £41.2 on a turnover of £171.9m in the year ending 31 December 2012. When annual financial results were announced on Tuesday shares were trading at 12.38p.