Formula does not compute

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This posting is the third in a series of trading peculiarities observed during the period of the last weeks of August of 2013 (go here for the second posting and here for the first posting.)

Over the last days, FORTY, the equity of Formula Systems, an Israeli company that I follow, has taken a beating on the tail-end of panic related to Syria’s apparent use of chemical weapons near Aleppo. So did most other equities for company based in Israel, of course, so nothing unusual here.

What is unusual is that today FORTY has not recovered in line with the other Israeli stock in spite of the fact that the BID/ASK price is higher than the per per share price of the last transaction:

FORTY August 29 2013

Observe that the per share price for the last transaction, and, therefore, the benchmark for the market capitalization is $22.80, down from a high of $24.25, just a few days ago. Observe also that the BID/ASK pairing is $23.07/$23.81, considerably over the $22.80.

This situation, where the true market price cannot get to the surface is unusual, but it is par for the course for FORTY, which regularly is subject to trading peculiarities (see, for instance, here) and which for years have been at a price level that reflects a market value significantly below the true enterprise value of Formula Systems.

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