Most technology users will not know that Opera (OPRA) is a website browser supplier. Supposedly based in Norway (per a Google search), investors learned the hard way that its opaque ownership structure is a red flag.
Despite falling by 29% on July 14, OPRA stock gained almost a triple (up 252%) in 2023. It even initiated an 80-cent dividend to yield 4.05%. Why are markets fretting over its $300 million shelf offering?
Opera announced an unfair distribution whose shelf offering will not raise money for operating the company. Instead, insiders, who own 71.2% of the company, will profit. China-based Kunlun Tech is the biggest owner. Keeneyes Future holds a 7.6%. Chief Executive Yahui Zhou controls both Kunlun and Keeneyes.
The Chinese national’s sale is bad news for speculators who chased the stock’s rise recently. Zhou may unload even more shares within the next three years. Anyone still holding shares after last Friday’s market close is a potential bag holder. The sale will flood the market with an oversupply of its shares. The weak demand will hurt its share price further.
Your Takeaway
Savvy investors who did not chase OPRA stock should still avoid it. The company has no unique business offering in the tech industry. Even new leadership will fail to accelerate the firm’s business.
