Single shareholder to blame for Ambri's pre-Christmas crucifixion

Biosensor company Ambri (ASX: ABI) has learned first-hand the fickle nature of the share market -- a stock slide that saw the company lose almost a third of its value since mid-December, before recovering 22 per cent on Friday, was precipitated by a single shareholder selling off its entire holding in the company.

The shareholder, which had acquired several hundred thousand shares in Ambri when the company did a backdoor listing through Optecom in August 2001, apparently starting dumping its shares when it went into receivership late last year. Ambri believes that all of the shares have now been sold.

"We got crucified," said Bruce Cornell, Ambri's senior VP and chief scientist.

But it took a while for Ambri management to figure out exactly what was happening, he said. "What had been puzzling us was why just one group was responsible for selling off a major amount of shares."

The incident came as a blow to management, who had recently completed a deal with Dow Corning and Genencor International, which acquired 7 per cent of the company in November. The three companies plan to seek military funding to develop Ambri's biosensor technology for chemical and biological weapons detection.

Financially, Ambri appears to be in good shape, with $AUD13 million in the bank, and is back on track with the rollout of its first diagnostic system, said Cornell.

"It shows how precarious the share price is," said Ambri in-house legal counsel Bernadette Kerrigan.

Kerrigan noted that the experience highlighted issues of share management, and said that Ambri was by no means the only company to have had that experience.

An analyst told Australian Biotechnology News that sales of larger volumes of stock were likely to have an accentuated impact on biotechnology shares due to the nature of the market, and did not necessarily reflect on the company. He pointed out that a collapse in the share price was also an opportunity for stock acquisition by other parties.

After bottoming out at $AUD0.61 last Thursday, Ambri gained $0.19 to close at $0.80 on Friday.