Ensogo, now a penny stock, halts share trading

Ensogo, the struggling ecommerce company that has seen its share price obliterated nearly down to zero, today saw its trading suspended (PDF file) on the Australian Securities Exchange (ASX) pending an announcement.

The bourse said the suspension would remain in place until the opening of trade on Tuesday, June 21 or when the announcement is released to the market. It did not provide further details.

The trading halt follows the resignation of two Ensogo directors – Thomas Baum on June 16 and Frederique Covington on May 20 – as well as the selloff by a big shareholder.

On May 24, The Australian reported that Macquarie offloaded 2.3 million shares in Ensogo for A$0.50 apiece, marking a 50 percent discount to its closing price at the time (click here for the disclosure).

No reasons were given for the directors’ resignations.

This comes as Ensogo’s stock has been taking a beating on the ASX. Ensogo shares last closed at A$0.65 on the market, with its market cap at A$78.89 million (US$58.3 million) according to Google Finance or lower at A$25.43 million (US$18.8 million) according to Yahoo Finance and MarketWatch. That’s a spectacular fall from its heyday in 2014, when it briefly traded as high as A$12.80. The company has effectively been a penny stock – with shares worth less than a buck apiece – for about a month.

We’ve asked for Ensogo’s comments for this story and we will update it when we hear back.

Going down

Formerly known as iBuy, Ensogo owns a network of ecommerce websites in Hong Kong, Singapore, Malaysia, the Philippines, Indonesia, and Thailand. It is owned by Catcha Group of Patrick Grove, who also established online businesses iProperty, iCar, and iFlix.

Ensogo has been embroiled in controversy after its merchants complained about delayed payments starting in April this year.

See: Merchants angry they are not getting payments from Ensogo

The company blamed this on a “slowdown in management of merchants” following its decision to centralize its operations in Singapore and cut its headcount.

The company reported in April that it laid off half of its staff, bringing its employees to under 300 from 600 at the start of the year. It said the move was supposed to reduce its cash burn by 40 percent this second quarter.

See: Ensogo fires half its team following financial woes