👉 Background: Yellow Brick Road is a mortgage broking company that's been on the ASX since 2011. Its claim to fame is that it was founded by none other than Celebrity Apprentice, Mark Bouris.

👉 What happened: Yellow Brick Road originally floated in 2011 at a share price of 40c, but it's now down to a 5c. So Yellow Brick Road's Chairman Mark Bouris has announced plans to delist the company from the ASX.

👉 What else: There are two main reasons for its delisting:

1. Mark Bouris reckons the business is "misunderstood" - about is as misunderstood as the fine print on a mortgage contract.
2. 62% of Yellow Brick Road's capital is held by just four shareholders, and this is believed to be distorting the liquidity and undervaluing the share price.

What's the key learning?

💡Market liquidity refers to how easily an asset can be bought or sold without causing a significant impact on the asset’s price.

💡In Yellow Brick Road's case, there is a major concentration of shares among a few investors. For example, Yellow Brick Road reckons there have been days where only $7,000 worth of trades have been made on the shares. This led to a 1c shift in the share price that caused a $3.3 million drop.

💡 So, Yellow Brick Road's valuation has been more jittery than a first-time homebuyer trying to understand offset accounts.

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