Avalon Shares Soar, Then Crash After Big Stock Buy
WARREN, Ohio — The share price of Avalon Holdings Corp. soared late last week and then crashed Monday because of a buying spree from an investor group based in the Bahamas.
According to a Form 3 filing with the U.S. Securities and Exchange Commission dated July 27, Nassau-based MintBroker International Ltd. disclosed it had acquired 1,922,095 outstanding Class A common stock shares of Avalon Holdings, driving up share prices to $10.25 by the close of business that day. Avalon shares closed at $2.21 the previous Friday.
On Monday, premarket trading hit as high as $36 and then plummeted to $8.18 at close. However, MintBroker disclosed through a Form 4 filing Monday it had sold off 719,885 shares at $8.17 per share.
Avalon’s share price was trading at $3.74 as of 11:40 this morning.
MintBroker is a broker dealer founded in 2011 by Guy Gentile, according to press reports. In 2012, Gentile reportedly began working as an informant for the FBI after he was accused of setting up “pump-and-dump” schemes that took investors for about $17 million.
Avalon Holding Chairman and CEO Ron Klingle said his company has nothing to do with MintBroker, and he’s unsure as to what its intentions were when it gobbled so much Avalon stock.
“We know very little about what he was trying to do,” Klingle said. “There’s a lot of speculation out there.”
Gentile told Bloomberg.com on Tuesday that his intention was to take control of Avalon, and not to hatch a pump-and-dump scheme. “We were going to try to do a hostile takeover of the company,” he said.
But Gentile could not take over Avalon no matter how many shares he purchased.
Klingle holds approximately 67% of voting power at Avalon, and he has no “present plans to divest any of his holdings,” according to a statement issued by the company on Monday. A proxy statement issued with the company’s annual report on April 26 shows that Klingle owns 611,133 shares – or 99.8% — of Avalon’s class B common stock and 170,471 shares of class A common stock. He holds 67.4% of total voting power, the proxy statement says.
“While the company is confident in its business plan, it has made no recent material changes to that plan and is unaware of any information or events that would warrant the stock activity over the last five days other than the purchases disclosed in the Form 3,” the company said.
Avalon Holdings provides waste management services to industrial, commercial, municipal and government customers, as well as landfill and wastewater injection services in northeastern and Midwestern markets.
Avalon Holdings also owns Avalon Resorts and Clubs Inc., which includes the Avalon Inn hotel and three country clubs.
“Nothing is going to change here,” Klingle said.
Copyright 2023 The Business Journal, Youngstown, Ohio.