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It might not come to requiring a RI / dilution, in which case there is significant upside to the share price in the short term. Just think anyone holding into the trading update and New Year should consider a RI / dilution as a possibility and what the implications are. I'm a long term holder, hoping they can make it in the short term without a RI / dilution, but if it does come to that I would prefer to hold through it and take the dilution, than sell at these levels. At least that way there is some prospect of benefiting from the company making progress with their current order book and turning a profit from some of the contracts.
I was thinking about this last night and doing some rough calculations. If they have to dilute shares by issuing new at 3 to 1, that would take outstanding shares to approx 2bn. A share price of 20p implies a market cap of £400m which was approx the valuation in October when the share price was closer to 80p and there were not the current liquidity concerns. Upwards share price movement from 20p in this diluted situation would be dependent upon them making progress on collecting cash, completing legacy contracts, returning to profitability etc. There were points last year when the market cap was £600-700m, the order book was smaller and without the recent contract wins. RI / dilution isn't completely disastrous, but it does really cap the upside. To get back to 80p-£1 share price you'd be looking at a market cap of £1.6-2bn which is something PFC hasn't had for several years and if they can achieve it, would likely take a few years.
All I want for Christmas is to short squeeze these two:
Astaris Capital Management LLP 2.26% 0.16% 7 Dec 2023
Helikon Investments Limited 2.33% 0.12% 7 Dec 2023
Total more or less unchanged at 9.19% as one other reduced their short %, but these two greedy f*ckers increased again.
Fitch revised their credit rating on the company and their bonds 2 months ago and upgraded the outlook to stable. There has been no new financial information from the company since then. Their report is worth a read.
https://www.fitchratings.com/research/corporate-finance/fitch-revises-petrofac-outlook-to-stable-affirms-idr-at-b-27-09-2023
Exactly! There's no new information to go from other than the daily trading data. Very unusual to see such negative share price movements on little to no new information, so it's interesting to hear what people's theories are. I have held positions in PFC in varying quantities and price levels since 2020, have experience the wild volatility before, so just waiting until there is some actual announcement.
It's going to be entertaining watching the shorts cover their short positions come the trading announcement or even in the week leading up to it. 27m shares sold short against average daily volume of 4-5m. Share price fall in the last month almost entirely driven by those building short positions. Started beginning of October when the short positions started to increase and got worse as the short positions increased. Yes there are issues at PFC, but a 50% fall in 1 month with no news is driven by shorters trying to be opportunistic.
Reduced long to 75k shares due to risk of news before the market reopens. Holding the remainder overnight. Will review position in the morning.
I've gone long 150k shares in the last hour for a short term swing trade. It has absorbed a lot of selling today. Looks like we've bottomed for the day and there could be some amount of upwards movement this afternoon. I understand the risks, I have stops to the up and downside and do not intend to hold the position open for very long. Trading this simply as an instrument based on technicals. DYOR and know the risks. Anyone else want to get involved?