Three directors of Brinkley Mining, the uranium mining group that listed on AIM on Monday, bought shares in the company yesterday, to try to support the price after a disastrous first week of trading.
Gerard Holden, the chairman, bought 48,000 shares, while the non-executive director, Kiran Morzaria, and finance boss, Donald Strang, bought 10,000 and 15,000 shares respectively. The shares closed up 2.25p at 30.75p, having been placed on AIM at 50p per share on Monday. Sources close to the company said the group was poised to appoint a joint house broker in the wake of its poorly received flotation.
Some investors blame the financial adviser behind the float, the specialist corporate finance boutique Beaumont Cornish, for the collapse in the share price, saying there was insufficient marketing for the offering and a lack of new investors lined up to provide buying support for the shares. A source close to the company said "five or six" larger brokers had approached Brinkley to offer their services as joint house broker. Mr Holden, a former head of mining investment banking at Barclays Capital, said he was "very unhappy" over the performance of the shares, although he denied he would seek to replace Beaumont immediately.
He said: "The last few weeks have seen weak trading in uranium mining stocks, and I am very upset for people who put money into us at 50p. Even so, we are happy we have the right partners and believe we are moving the company in the right direction."
Traders blamed a single investor, thought to be a broker representing Australian clients, for the selling pressure that led to the poor performance of the shares. Mr Holden said most investors had provided good support and had not sold any shares.
Brinkley raised £10m in a private placing in February at 20p per share, and market sources said normal "lock-in" restrictions, where early investors are banned from selling stock soon after the IPO, were applied only to shareholders with more than 10 per cent of the equity.
Market makers were also critical of the company's decision to begin trading on the Sets electronic order-driven system.