Algoma share price drops to $2.25

After opening today at $13, the price of Algoma Steel's new common shares dropped this afternoon to $2.25.

For much of the day, investors avoided the stock in droves.

CIBC World Markets Inc. bought one share at the opening price of $13 at 9:33 a.m.

The next trade was at 10:29 a.m., when TD Securities Inc. bought 100 shares for $5 each.

That was it for the rest of the morning.

At 1:18 this afternoon, the price dropped to $3, with TD Securities buying two 100-share lots at that price.

Twenty minutes later, the price was even lower, $2.25, and volume appeared to be picking up.

"We don't have a recommendation on it," Ford Upton, an investment advisor with the Sault office of Edward Jones, told SooToday.com.

The restructured company has no track record, so any decision now to buy Algoma shares would be speculative, Upton said.

"In the short term, we're probably going to see some volatility. It will be more opinion than fact."

Because of strong local interest in Algoma's future, Upton was nonetheless keeping a close eye on the ticker today.

20 million new Algoma Steel Inc. common shares were posted for trading this morning on the TSE, under the symbol AGA.

According to the company's plan of arrangement and reorganization, former holders of the Algoma's first mortgage notes received 15 million new common shares, employees received 4 million new shares and unsecured creditors who did not take cash for their unsecured claims got 1 million shares.

Algoma's old stock is worthless and holders of it are not entitled to receive new stock in exchange for their shares.

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