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" Shorters have to borrow stock from institutions and those institutions are demanding much higher interest payments to reflect the opportunity cost (or rather potential loss) of not being able to sell now.
Some lenders are calling in their shares so that they can sell now, squeezing some shorters."
I would suspect that many II holders took out some kind of Derivative some while ago in order to hedge against the falling share price ....lending shares may well have assisted that Derivative protection bet...
Such derivative protection hedge would continue as the SP falls
I somehow doubt they would lend to shorters in order for them to heavily assist the falling share price without having some benefit for themselves, on their side of the table
"They have not said anything significantly alarming"
$200m equity refinancing for a $100m company = 80% reduction in value for current shareholders.
The question is whether its enough. Package is $300m, should release £200m, we will still have the debt, its gives a group of bond holders most of the company, they will want all of it I suspect.
Johny Thanks
Yes Amers, fee is payable right up to borrowed shares being returned, or until liquidation if that is the case
Paul - question for you when shares are suspended on Wednesday, will the shorters would still have to pay the borrower...i.e weekly or monthly
Paul
Thanks for your explanation.
Will be interesting to see the declared shorts position after suspension.
The saga continues
Apothecary: your posting history here suggests that you forgot to post when you sold, before this 15p repurchase.
Excellent timing though and looking forward to your sell notification, lol :)
I remain on the sidelines, although watching the SP action with interest.
I had (and still have) no idea how this is going to play out prior to suspension; watching to see what the shorts list looks like this evening.
Good luck to those still here and those adding/trading it right now. Hope you make some good money.
My understanding is that the borrowing costs have recently rocketed up.. Shorters have to borrow stock from institutions and those institutions are demanding much higher interest payments to reflect the opportunity cost (or rather potential loss) of not being able to sell now.
Some lenders are calling in their shares so that they can sell now, squeezing some shorters.
I assume that different shorters have different borrowing arrangements and some are more solid than others.
IMO there is a game of chicken being played between shorters and equity with end of play tomorrow the deadline. Any sensible equity holder who has actually read today’s update has to be out pre suspension, it’s just a question of finessing the best price.
Paul
Whilst I agree with you to some extent, why did the SP open at 15p then rise to 19p? Some will say “shorts exiting”, why would they exit now given your scenario which would put the shares around the 4p mark.
I’m holding very nominal amount as I diluted heavily some time ago now. I’ve said recently that if the business can put a lid on the debt, clear the loss making legacy contracts and move onto profitability then it can secure a future. The last couple of years have been torrid and full of empty promises hence the current situation. I will keep my nominal holding as a marker or a lesson, we shall see
When the shares are suspended the short positions cannot close. As there is a small risk that the shares are permanently suspended they are forced to close out over two days pushing up the equity value or at least maintaining it. The D4E is worthless to lenders if the shares are worthless. The company is not technically insolvent but could be wound up overnight if it became de facto and de jure insolvent and creditors made a move but that won’t happen. The D4E will be no where near as bad as is being suggested. A takeover is looking more and more likely but DYOR.
"Shorters closing", "Shorts buying up all PIs shares", Not from where I'm sitting. All Tosh!
Shorts still over 10%, what evidence is there that shorters are closing in numbers. Reaction to the RNS is pretty standard in that the market nearly always over reacts to bad news and same with good news.
LTH in for long term, unfortunately a lot longer than anticipated - win some lose some, but on we go
I imagine this is a legal thing. From the moment the financial report is late - shares are suspended. This is why it is not immediate - and shares continue until then. So my guess is this is not their call - but a legal position imposed.
Conditions are right for possible short squeeze
Got in again at 15p - bargin! Shorts gonna close now - up from here everyone - sorry anyone who has losses and sold
It states in the RNS the shares will be suspended on WED May the 1st.
Paul,
What you say makes absolute sense but can you explain why shorter are closing or why the shares are being bought?
Thanks
Today’s RNS clearly states that PFC is insolvent. It is being propped up by BH’s and the Banks. I assume no one disagrees?
So PFC are in a very weak negotiating position. Bondholders and Banks hold all the strings and are providing the only solution.
So ask yourselves, will they give current equity a good deal or will they offer the bare minimum that they can get away with?
Current market cap is £118m or $150m. My best guess is that current equity will end up with a % worth £25m/£30m to represent the value of the listing. Look at what happened with GKP, it’s the law of the jungle.
What else can PFC do other than accept whatever BH’s/Banks offer if it’s the only route to avoiding insolvency?
Wise words Mary with all these shorters on here today.
No doubt all those who r saying sell/sold out, will come back and say they bought them at lower price. Fecking crock lot
Tony mate
Twisting as usual - the point re tax losses is that it means there is still a value well above zero. PFC is not the first company to go through a restructuring. TUI EZJ come to mind recently.
PFC is part of a balanced portfolio for me. That is key.
Sub 14p to 18p - hmm - you must be scratching your head atm.
Must be galling to panic out for sub 14p when 18p is available.
Patience in spades here.
Last post today.
I will continue to trim and add and lower average today and tomorrow.
I'd be interested to hear of positive outcomes in similar situations with other shares. Someone mentioned Tullow having been in a similar situation? I'm still holding, for what it's worth.
Suggest open a new account “tuan7” and try yet again to make a sensible investment.
People believe her as a master trader
If UK gov want more peoples buy shares so first thing they do is bring all crock CEOs to prison as this is an example how bad and mismanagement his did for company. Yes CEO took apart on shorting his owe company and doing to help shorters. Never company tell market we will suspend in next 48 hours to help shorters run away and close their short.
Here she goes again. ..