Cambridge Technology Enterprises shot up by 3908% between February 2014 and December 2015
Cambridge Technology Enterprises (CTE) is supposed to be an information technology service-provider. CTE had a big bang initial public offering (IPO) in February 2007 that smacked of price manipulation. With a listing price of Rs45, the stock shot up by 122%, to Rs100, on the day of listing. It wasn’t long before it crashed. By the beginning of April 2007, the stock was down 50%, to Rs50. After extreme volatility in the stock price over the next two years, by February 2009, the stock price was down to Rs13. In February 2014, the stock hit another low of Rs3. This marked the starting point of a steep rally. Over the next 20 months, the stock shot up by about 4452%, to Rs145.20, on 14 October 2015. After another crash of 37%, to Rs91.90, the stock price shot up, once again, to Rs138.90, on 29 December 2015. The stock is up by 4254% from its low in February 2014.
As usual, for such stocks, the price rise is not supported by financials. The small-cap stock reported revenue of Rs25.34 crore for the year ended 30 September 2015, up by 6.29% over that in the same period last year. Net profit increased to Rs2.72 crore for the year ended September 2015, from Rs1.5 crore for the same period in the previous year. CTE is quoting a price-to-earnings of nearly a hundred times. In April 2007, Bhavin Chedda was charged with creating an artificial market and price manipulation in CTE and a few other companies. However, in November 2008, he was let off by the regulator, through a consent order, after paying a fine of just Rs1 lakh. It seems that the price manipulators are back and the regulator is twiddling its thumbs.