In a surprising turn of events within a short span of time, Opera recently submitted a Form F-3, revealing a mixed shelf offering worth $300 million. This particular offering enables the selling shareholders, who are associated with Opera’s Chairman and CEO Yahui Zhou, to sell up to 141.77 million ordinary shares or an equivalent number of ADSs (each ADS represents two ordinary shares) in one or more transactions.
The selling shareholders involved in this case have affiliations with Opera Limited, specifically Kunlun Tech Limited and Keeneyes Future Holding Inc. Combined, they possess a significant portion of Opera’s shares, amounting to around 78.8% or approximately 141.77 million shares, equivalent to 70.89 million ADSs.
The market naturally reacted to this news, resulting in a 30% decline in OPRA’s value on July 14 as investors attempted to factor in the impact of the mixed shelf offering. It comes as no surprise that the selling shareholders sought to take advantage of the recent surge in OPRA, which has seen a remarkable climb of over 600% since October 2022, in order to capitalize on their gains.
This development serves as an important reminder to OPRA holders to exercise caution and avoid blindly following momentum, as market reversals can occur suddenly, catching late buyers unaware. Additionally, it is crucial to note that Kunlun Tech, which holds more than 50% of the voting power, exerts control over OPRA. As a result, ADS holders should be aware that they do not possess shareholder rights.
Considering these factors, it seems that the headwinds for those who joined OPRA during the recent surge may continue to strengthen in the future. Moreover, the current price action indicates a potential bearish reversal, although confirmation will only be possible at the end of July.
Upon examining OPRA’s long-term price chart, a striking resemblance to Kunlun Tech’s stock chart (listed on the Shenzhen stock exchange under the ticker symbol 300418) becomes apparent. This similarity suggests that significant profit-taking is currently underway.
Furthermore, it is worth noting that Zhou has already sold nearly $48 million worth of shares in June, indicating his perception of the recent surge as a favorable opportunity for further profit-taking. Therefore, for those who purchased OPRA at lower prices last year, it might be prudent to consider reducing exposure and capitalizing on the potential bearish reversal.
As for individuals who entered the market during the recent surge, this serves as yet another valuable lesson regarding the risks associated with chasing violent momentum swings. While upward momentum may be enticing, it is vital to bear in mind that when the tide turns, the subsequent fall can be quite painful.
