The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
Well, sometimes these sleepers wake up quicker than others. We are opening a bottle of wine on the strength of a 100% two-day rise. For the future 21p is likely, and 35 - 40p possible. Don't forget to lock your profits in with one or two Stop Loss orders though. There will possibly be a re-trace as the corporate guys dump and buy back shares to reduce their overall average buying price.
Yes, I asked a question. I realised that the money in the bank is not as it seems. If this company was as cash rich as it looks they wouldn't have issued this RNS dated 4/10/12 Funding Update Following recent announcements regarding Ceres' funding requirements, the Company announces that, despite extensive efforts it has been unsuccessful in securing sufficient funding for the business going forward. The Company will continue to explore all strategic options including a sale of the business, cancellation of the listing and in the absence of any alternative proposals commencement of an orderly wind down of the business. A further announcement will be made in due course. That RNS is from the company itself. We await the further announcement.
"While Peel Hunt thinks there is sufficient cash for an orderly wind-down of the company the broker is not optimistic that shareholders will see any of it." The only reason anyone is advocating a 'Buy' is so their company can offload worthless shares
According to Peel Hunt Investment shareholders have little or no chance of any return after bankruptcy: Thu, 4th Oct 2012 09:54 The future is looking bleak for cash-strapped Ceres Power, the fuel cell technology developer, as it has been unable to secure sufficient funding to keep the business going. The group had hoped to secure a new tranche of funding before the end of September to enable it to pursue its goal of delivering a "global cost leadership" mass market small combined-heat-and-power product. The company will continue to explore all strategic options, including a sale of the business, cancellation of the listing and, in the absence of any alternative proposals, commencement of an orderly wind down of the business. Broker Peel Hunt fears it is the end of the road for Ceres, after "eight years raising money on the back of over-promising." The broker has reduced its target price from 4p to zero. "A fresh approach from a new CEO [Chief Executive Officer] improved things but there was insufficient potential in the business to make it worth backing, in our view. Investors, who had put in £65m to date, apparently agree and have finally drawn the line." Peel Hunt notes that the firm's flagship product is still four years away from first commercialisation, and field trials have yet to start. On top of that, "technical progress still needs to be made, there is major uncertainty over manufacturing cost, the economic case for product adoption is limited and there was still a large quantum of funds needed to reach cash break-even," explains Peel Hunt's Andrew Shepherd-Barron. While Peel Hunt thinks there is sufficient cash for an orderly wind-down of the company the broker is not optimistic that shareholders will see any of it. "There is a chance that a third party buys the assets, or indeed the business as a whole, but we see a wind down as the more likely outcome," Shepher-Barron concludes. http://www.lse.co.uk/share-sharecast-news.asp?shareprice=CWR&ArticleCode=20407128&ArticleHeadline=Winddown_most_likely_option_for_Ceres_Power_Peel_Hunt_says
As I said; Worth a punt ;)
Read the RNS statement from the CEO no less who states that the business cannot go ahead now that all funding options have been explored and proved negative. He is intending to wind the company up. Read the RNS from Peel investments that says there is little hope for shareholders to get anything from the imminent demise of this company. The big corporate investers are selling shares like mad. I suspect the posters ramping this share are part of that big sell off. After all, they can only sell if people are dumb enough to buy.
Or even by tea time the way things are going :)
Company suffered from 'All eggs in one basket' syndrome and got shafted when their biggest customer gave notice to cancel its contract. This caused loss of confidence in their suppliers, resulting in cash flow problems and the company had to lose a lot of money in terminating the contract earlier than expected. 75% of the work force has gone, but now they have diversified, opened new accounts and more importantly, are asset positive. I agree with bbr391 - 21p plus and I think at least 15p by Christmas.
Worth a punt IMO.
Nice gain today. Fundementals looking good. It might be a quarter of the company it once was, but it is leaner, meaner and a lot more experienced. I reckon 35p - 40p by middle of next year is not out of the question?
Oppenheimer can only sell if people can be tempted to buy. Hence the ramping on here and elsewhere. The CEO says it is going down the pan and is planning an orderly bankruptcy, Peel Hunt brokers say that there is no hope of the company surviving and little hope of shareholders getting anything out of it. How much notice do you need?
The SP has gone from over 40p to under 10p and back to over 30p in twelve months. I've drawn profit twice this year, but crucially as Teutonic says; it was stagnant twice for over 5 weeks and in each case just before a big hike in SP. Perhaps you should have gone to Specsavers?
For what it is worth I smell a rat. If they have this sort of cash laying around in the bank they would not be seeking funding or talking of de-listing. Remember Game Group? They were supposed to be asset rich according to their Fundementals yet when things turned bad and suppliers wanted payment up front the whole pack of cards came tumbling down. The big guys are offloading. Doesn't that tell you something? Briansmith1000 is spot on IMO.
Kingpinz, I found the Fundementals to indicate a sound ongoing business that has every chance of recovering after or of they overcome the present difficulties. Hence my interest. However, the directors seem to be exercising their share options at an agred price, say £X and immediately selling them at the current market price, £X + which leads me to suspect that they don't want to hang onto them, and that leads me to wonder why? Director buying is one indication of a sound business, direcots offloading shares at a profit the minute they buy them isn't that reassuring. Fundementals aren't always what they seem. Game Group for example had a declared asset per share price well above the SP yet when push came to shove they turned out to be skint. Creative accounting is alive and well and possibly at a business near you.
I'd be interested in adding this to my portfolio based on the Fundementals and the inevitable short term bounce after all the sheep have fled. What is putting me off though are the Director's dealings. Any thoughts?
RNS issued to the effect that Hendersons Global Investment Group have increased their share levels above 11%. Looking at the recent share dealing (and allowing for LSE erroneously posting 'Buys' as 'Sales') it looks like someone is buying large tracts of shares on a daily basis.
Three dirrectors buying in before it reached 30p yesterday!