Atlantic Sapphire’s senior staff purchased tens of thousands of new shares of the company’s stock as its price tumbled in the wake of a disappointing 2020 annual report and Q1 2021 update.
In the reports, the Sande, Denmark-based company, which operates recirculating aquaculture system (RAS) salmon farms in Denmark and in Homestead, Florida, U.S.A., near Miami, reported a net loss of just over USD 55.2 million (EUR 46 million) in 2020, and it declared Q1 2021 a “lost quarter” for biomass gain.
The reports were published on 14 April, and on that date, a share of Atlantic Sapphire stock was trading at NOK 122 (USD 14.83, EUR 12.26). The price had plunged to less than NOK 80 (USD 9.72, EUR 8.04) on 21 April, before recovering slightly to NOK 88 (USD 10.70, EUR 8.84) as of 28 April.
On 15 April, seven Atlantic Sapphire executives acquired shares in the company, including chief financing officer and managing director Karl Øystein Øyehaug; chief technology officer Thue Holm; chief development and infrastructure officer Svein Taklo; chief sales and marketing officer Damien Claire; chief people officer Cristina Espejo; chief of staff Dharma Rajeswaran; and board member Tone Bjørnov.
Each acquired between 500 and 3,200 shares of the company at prices ranging from NOK 93.40 (USD 11.39, EUR 9.40) to NOK 96.10 (USD 11.71, EUR 9.67). Of the group, only Holm and Claire own more than 0.1 percent of the company, with Claire holding 177,470 shares, or 0.2 percent of Atlantic Sapphire total shares, and Holm owning 697,899 shares, or 0.9 percent of total shares outstanding. However, most of the executives hold tens of thousands of options on shares they have not yet exercised, including Claire with 108,644 options, Holm with 37,835 options, Taklo with 72,835 options Espejo with 22,556 options, Rajeswaran with 87,835 options, and Øyehaug with 28,861 options.
The next day, 16 April, Atlantic Sapphire Board Member Patric Flanagan acquired 900 additional shares, upping her holding to 4,900 shares, with 5,000 options yet to be exercised.
On 22 April, Atlantic Sapphire Chairman Johan E. Andreassen and interim COO Bjørn-Vegard Løvik acquired 20,000 shares in Atlantic Sapphire ASA through Alsco AS, a holding company they both own, at an average price of NOK 77 (USD 9.36 , EUR 7.74). On 23 April, they bought 20,000 more shares, and on 26 April, they acquired an additional 20,000 shares at NOK 89.70 (USD 10.90, EUR 9.02), bringing Alsco’s total holding to 9,759,540 shares in the company, corresponding to 12.1 percent of the outstanding shares. Separately, Andreassen personally holds 1,073,770 shares in the company and 111,188 share options.
Atlantic Sapphire Board Member Andre Skarbø executed similar trades, buying a total of 60,000 shares over the same timeline as Alsco’s purchases, bringing Skarbø’s ownership stake to 852,206 shares, corresponding to 1.1 percent of the firm’s outstanding shares.
Only one major owner of Atlantic Sapphire’s stock sold during the dip – on 19 April, funds managed by DNB Asset Management AS sold 266,355 shares, reducing the firm’s shareholding to 3,859,220, constituting an ownership interest of 4.78 percent of the total issued shares.
Of the eight investment banks that offer coverage of Atlantic Sapphire, only one – SEB Bank – has changed its “buy” recommendation on the company’s stock to a “hold.” Seven other banks, SpareBank, Nordea, Fearnley Securities, Kepler Cheuvreux, Pareto Securities, DNB, and Arctic Securities, remain bullish on the stock.
However, in a recently released audit from Finanstilsynet, Denmark’s financial supervisory authority, Arctic Securities was criticized for allowing its head of analysis, Morten Nystrøm, to actively trade in stocks he covered.
"[Arctic Securities] has not ensured that routines and procedures are in place to ensure that financial analysts, with knowledge of the probable time of publication or the content of an investment analysis, do not trade for their own or others' account in financial instruments covered by the investment analysis,” Finanstilsynet said in its report, according to Norwegian news outlet E24. "[It has] has not arranged its activities in such a way that the risk of conflicts of interest between the company and its customers or the company's customers between them is limited to a minimum."
Nystrøm was both covering and trading the stock of other seafood players, including Aker Biomarine and Aqualis Braemar. While Nystrøm was not listed as owning any shares in Atlantic Sapphire, Arctic Securities stockbroker Alexander Borgen holds over one million shares in Atlantic Sapphire, and two other company stockbrokers Esten Løkkebakken and Morten Aarnseth also own shares land-based salmon farmer, according to SalmonBusiness. Additionally, Arctic Securities acted as joint bookrunner in two of Atlantic Sapphires private placement deals in 2018 and 2019.
Nystrøm has since been moved to a different position at Arctic Securities and the company has said it will introduce new rules that will be “stricter than industry standards.”
“Arctic takes every case where our analysts' independence is questioned very seriously,” the brokerage told E24.
Photo courtesy of Atlantic Sapphire
