ReconAfrica warns against short sellers
Ed Reed, 02 June 2021
Reconnaissance Energy Africa continues to come under fire from various sources, including short sellers, but it has received public affirmation for its plans from local government in Namibia.
The Canadian company’s activities onshore Namibia have been criticised by environmental activists. Initially, worries focused on fracking, but they have grown to include the potential impact on water and elephants.
A whistleblower reported concerns on ReconAfrica to the US Securities and Exchange Commission on May 5, National Geographic reported. According to the report, the company had allegedly failed to provide important information in an attempt to increase its share price.
East Kavango Governor Bonifasius Wakudumo issued a statement of support for ReconAfrica on May 28. The article in National Geographic does “not reflect the integrity and business practices of ReconAfrica and its operations in our region, Kavango East”, he said.
Short sellers
ReconAfrica denied the allegations raised by National Geographic. It went on to say the story would “facilitate activist short sellers” who have been attempting to drive the company’s share price down.
A number of law firms have launched prospective class actions against ReconAfrica following the allegations.
Officially, there are around 3 million shares held short, around 1.5% of ReconAfrica’s total, the company’s IR manager Grayson Anderson explained. “It’s possible there’s a large naked short, but the magnitude of that is up for debate.”
