The share price of Spanish wifi company Gowex, which is listed on the Alternative Stock Market (known as the MAB in Spanish) plumetted by as much as 63% yesterday, rebounding slightly to close down by 46%. Its market capitalization went from 1.44 billion euros to just over 774 million. The slaughter followed a report from the British firm Gothan City Research, which promises that Gowex is "just like Pescanova and their shares are worthless"
The news is surprising, because up until now analysts have been saying good things about Gowex. Three shops are issuing buy recommendations and two say to hold. Still, the report had a major impact, the Financial Times echoed its findings, and people panicked. The CNMV did not have a chance to stop trading before the bottom fell out, which it was able to do for Pescanova, because the MAB is a private stock exchange.
The Financial Times said later that the British company was trying to favor short positions. That in and of itself is not unwarranted, but it is unjustifiable to orchestrate a media campaign to lower stock prices at the same time.
In this case, the CNMV should open an investigation to check whether there was any malfeasance. Perhaps it has already done this, although it has not said anything officially on the issue. In the end, the Gowex case shows how the MAB's infrastructure needs to be improved and strengthened.
