(Bloomberg) -- Shares of Grupo Elektra tumbled 67% on Monday after regulators ordered the exchange to resume trading following a months-long halt, wiping off almost $5 billion from the fortune of billionaire Ricardo Salinas Pliego.
Shares of Elektra changed hands at 310 pesos per share compared to a 944.95 price where it last traded in July. Bolsa Mexicana de Valores said in a filing early Monday that it had been asked by regulators to let the stock trade even it blew past circuit breakers in the premarket auction — a mechanism which had barred it from resuming for days.
Trading resumed even as Elektra said in a statement before market open that it had a court order keeping it blocked, adding that anyone dealing in the stock could be held responsible.
“It is our obligation to reiterate that the resumption of trading in these, in addition to causing irreparable damage, could involve shares obtained improperly,” Grupo Salinas spokesman Luciano Pascoe said in a response to questions.
4-Month Halt
Salinas himself had triggered the trading halt back in July, alleging he was a victim of potential fraud. His lawyers claimed a creditor had used the company’s shares to fund a $110 million loan, and later discovered most of the shares appeared to have been sold, pushing the stock price down. The rest, they say, was pocketed by the creditor, who has denied any wrongdoing.
“It is important to remember that any eventual consequences are the exclusive responsibility of their buyers and sellers.”
After a month of no trading, Elektra got booted from the country’s main stock gauge. Now, it’s facing selling pressure from exchange-traded funds managed by BlackRock Inc and The Vanguard Group, which need to dump shares.
Officials had been trying for days to lift the halt, but the low bids immediately triggered a market circuit breaker designed to limit volatility, suspending it again. Lawyers for Salinas had argued to keep the stock from trading, saying it would cause “irreparable damage to the company.”
$5 Billion
Salinas’ nearly 75% stake in the company is now worth about $2.5 billion, down from $7.6 billion on Friday. That gives him a net worth of $5.5 billion, according to the Bloomberg Billionaires Index.
Salinas, 69, has long been the third-wealthiest Mexican behind Carlos Slim and German Larrea. With the slump, he slips to the fourth place, now behind Alejandro Bailleres.
Beyond Salinas’ stake, ETFs and other index-tracking funds hold around 4 million in shares out of 47.8 million in free floating shares, according to data compiled by Bloomberg.
While the slump is vaporizing Salinas’ wealth on paper — which had been a key fixture of his ability to take loans out against Elektra’s value — it could make a bid to de-list the shares easier. Elektra said last week it would hold a meeting in late December to discuss taking the company private.
--With assistance from Carolina Wilson.
(Updates pricing throughout, adds comment from Grupo Salinas after paragraph three.)
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