What is the secret of Mechel shares?
Ordinary securities of mining and metallurgical organization Mechel, owned by Igor Zyuzin, went up by more than 65% within two working days of Moscow Exchange. On January 6, one share grew up by 21% and by the end of the day it cost 75.6 rubles. On January 8, it had already reached 104 rubles, but then adjusted throughout the day to 97.5 rubles.
A similar development occurred with the preferred shares of the company. At the beginning of trading, one share cost 89.85 rubles, by January 8 it had risen to 123.65 and stopped at 119 rubles per share.
Compared to December, the company significantly increased its trading volume. If earlier it barely exceeded 100 million, then now it amounted to 4.3 billion for ordinary shares, and 1 billion for preferred shares.
In addition to a successful performance on the Russian market, Mechel has grown on the New York Stock Exchange. As a result of trading on January 3, depositary receipts increased in price from $2 to $2.7, growing to a maximum of $3.16.
Till the last investors thought this was some kind of mistake. There was no news from either the company or media that could affect its growth. The only piece that could influence the outcome of the auction was that the company agreed to waive debts, but no one knew about it.
Mechel is one of the Russian companies, which is on the list of the most debt-ladened. Its debt load in 2019 was 6.9 EBITDA. In monetary terms, the figure is 408 billion.
Boris Krasnozhenov, Head of the analytical research department at Alfa-Bank, noted that the shares of the enterprise, despite the trading results, remained quite volatile. If anything affected the value of the shares, then it could be last year speculation. For example, fake news about the sale of the Elginsky field in order to use profit to pay off debt.
Discussions on refinancing the debt load could also stimulate a rise in stock prices. Even if this turns out to be true, it is still unknown on what conditions will be held.
Mechel has been operating since 1995, at the moment the company takes 26th place in the list of “200 largest private companies in Russia” in 2019. The company supplies coal and metallurgy products to Europe, Asia, America and Africa.