Jan - don't take this the wrong way, but are you new to shells? They won't pay cash for the business, and the fees will be �500k not �200k.
Take a look at the history of EVRH, a classic of what can happen for a holder at the stage MORE is at - IF it goes right. Which it rarely does! (This is a rough summary, pedants look away): Previously called Armstrong Ventures, they were a �2m cash shell worth around �2m, with shares at 1p each. They bought MelodyVR for �5m in shares, so were worth �7m. Melody had no revenue and needed cash to film music gigs in VR, with the aim of streaming them. The �2m (less �500k of fees) was thus available to fund Melody's expansion. The share price rose steadily as they signed deals with record labels etc. I sold all the way up to 6p when I sold the last of my holding. They've done some fundraisings along the way so they've got plenty of cash. The deal was done early 2016 with an intention to launch the app later that year. As far as I'm aware there's still no revenue but someone - Facebook or whoever - may well buy them for their rights and content, and the shares have risen 2-3 times from the 6p level I sold out at. So they've risen more than tenfold from the shell level, even though the jury's still out on whether MelodyVR will ultimately be successful.
Plenty of others have similar, if not quite so lucrative, stories. Then there are plenty that screw up - but if the brokers didn't think an acquisition would be well received the deal probably wouldn't happen.
Ade what exactly are you hoping for in the statement due on 6 June? It's only a Companies House Confirmation Statement and as such will simply confirm the registered office, director details, and at best will update us on who the shareholders are. There will be nothing about trading at all, it isn't a set of accounts. And unlike accounts there's no penalty for filing it late, so it often seems to get overlooked and only filed once Companies House send a reminder out.
Hi Alex, I’m not sure that changes much! MORE are focused on getting a deal done. Not sure it’ll happen before suspension but what chance do PLMO have of getting the management dispute sorted then finding a candidate and then getting the City’s lawyers accountants and brokers to put aside their summer holiday plans and have something done by the start of September? Roughly none, I would suggest! At least, surely nothing to justify the massive disparity in valuation.
I think if the consensus is that HH shouldn’t be involved in finding the RTO candidate, I’d have been more optimistic if the fundraising had gone ahead then the largest holders had told him privately to go, under threat of an EGM to remove him.
Exactly risk. As a shell this could clearly do well if it finds something good, but it’s trading over an illiquid asset value while the clock is ticking. Whereas MORE is trading at half its cash with a similar time constraint, and PIRI is trading at asset value with no time constraint.
Obviously it’s all about the deal that can be found but hence my comment about PLMO looking pretty unattractive at this price.
Risk - think I’m the only person here who’s said he subscribed for shares, and while I’m no fan of what HH has done here, I think PLMO is in mortal danger if it has no new funding and spends its time removing HH instead of finding a decent deal.
But if you were a rebel I think it’s a perfectly respectable position to vote against the placing but to subscribe so you maintain a decent voting position in case you fail this time and it goes ahead.
All in all I’ve ended up ok here. MORE is in the same position time wise as PLMO but has cash worth double the share price and a board which isn’t in open warfare with its shareholders, so I’ve added there. I also like PIRI which is in reality a shell but technically an investment company so has no time limit to do a deal.
Peer - yup I've no doubt it will get refunded. Just mean that technically I'm not out of PLMO in that I've sent a load of cash off to buy PLMO shares which I haven't yet had back. Once that's back I'll be left with a very small stake at an average buy around 1.3p. In two minds about what to do with it - might keep it and see what happens: Dr Burton has promise and some of the other declared shareholders look to be worth following :-)
Ugh. I wish I could see this as good news for investors. Over a third of our trading time as a cash shell has elapsed. Of the �270k we raised successfully, I wonder how much has been spent on calling two pointless general meetings and not one but two aborted fundraisings. Maybe we have enough cash left to call one final meeting? Assuming there's essentially no cash (given we know we were out at the end of January as we announced we had to borrow �50k) our only assets are two IOUs to North American companies. One looks decidedly suspect. The other is an oil company that's been trying to list on AIM for a year but still hasn't, and which spent $300k in Q4 of 2017 and had $130k left at the end of that quarter. Let's hope they manage to raise the current running costs and enough to pay us back otherwise we really don't have a lot.
This is suddenly looking like just about the worst shell on the market, isn't it?
Well this all got a bit abusive while I was busy at work! C’mon guys let’s all relax a little.
Opti - here’s what’s still bugging me: HH has a fairly small stake in GUN. He owns Nivalis outright. We’ve established he’s a director at a lot of places and Gunsynd isn’t a full time role. So... why is the conditional 0.75% fee for his time helping Fastbase float getting “donated” to Gunsynd? What’s in it for him?
And everyone else - stop abusing Opti. I don’t share his optimism but as one of (if not the) largest PI in GUN he has put his money where his mouth is and remains the definitive word on the bull case for GUN.
(I’m delighted to report I’ve no idea about what BN says these days. I assume that’s still all nonsense and I can only reiterate that there’s a filter button which might make everyone’s lives more pleasant and efficient.)
Anyone else had an email today inviting them to buy shares in Wikisoft before it goes public on the UTC in the states in August?
Find it a bit disconcerting that Rasmus is attempting a near simultaneous float of both his businesses in two different jurisdictions, and in both cases is pocketing cash up front before the main issue.
An update on Fastbase would be helpful!
Deano this is where I'm a bit more optimistic. The company has �3m of assets and a �2m market cap, with enough cash to keep the lights on without being a forced seller. The FastBase bonus is, I would argue, in the price for free. Now, I happen to think that's probably the right price!! But it does mean that I don't expect much if any of a fall if a float doesn't happen.
I think there ought to be a bit more consistency between views of HH on the GUN and PLMO boards. At least one board is wrong about him! If neither Oyster or Fastbase float, I think we have to consider the sense of continuing to be a small investment company trading at a discount to NAV, with the plc running costs creating a huge hurdle which limits the return we can generate.
I see value here which is why I'm invested. I'm nothing like as positive about this share as Optimist is but he presents the positive case for GUN eloquently and from a heavily invested position. And he does it comprehensively and with sufficient regularity that no-one else need to!
To that end, I've enjoyed this board much more since filtering out BN a month or two ago, and thoroughly recommend it to others.
I don't think I'm a detractor but in Optimist's eyes I must be. I guess I just come back to the point I made some weeks ago, that Gunsynd is a part time board and an admin person, and there's limits to what can be achieved. So I'm sceptical that we're being gifted such an apparently hugely valuable asset, in return for a little bit of HH's time. If either one of Oyster or Fastbase float in the next eight weeks like they're meant to, I will be amazed. I note neither have yet appeared on the London Stock Exchange page about AIM new issues, unlike others coming later this month.
I suspect we'd be better off finding a single exciting business and using the GUN shell for an RTO.
Still feel the views I expressed in March (that GUN will continue to trade at a huge discount to NAV and that Fastbase isn't going to be a bonanza) continue to be the most likely set of outcomes. Mind you, I hope I'm wrong.
baz - yes I noticed this. Must say I wondered (a) why they didn't announce this at the date of exercise and (b) why to my knowledge they have NEVER mentioned these warrants before! No mention of them when we bought the ECO shares, and no mention of them in last year's accounts which mentioned the investment as a post balance sheet event.
Normally with AIM it feels like it's the other way round, hidden liabilities rather than hidden assets. But not great for transparent investing. Wonder whether there's anything else we don't know about?!
Peer - in days the board will change. Totally agree re Dr Burton, and Wress it's great that he's buying heavily and it's not that this means "nothing", any more than it's "everything". Bottom line Pires is a better shell at these prices. But I'm sticking with both for the time being!
Thanks. As I'd said in the original post, I just think it's an extra risk factor. What we have here is already a situation where (a) I'm personally sceptical about the recoverability of the SecurLinx loan note (b) we're up against it time-wise, and (c) some large shareholders are clearly unhappy with the board composition, providing a major distraction to getting a deal done. Add to this the uncertainty about how much cash this shell can raise and how much the structure might constrain future growth, and I wonder about this investment. Like any shell it could soar, and I've done well in the past from the likes of EVRH, JDG, whatever Cupid is these days... but when I look at my current portfolio of shells, I can't help feeling that, for instance, PIRI is a better shell - similar size, assets more solid, board more stable, and no time limit to find a decent investment.
In general I guess my views are more nuanced than most, who seem to be strong buy or strong sell on everything. PLMO strikes me as not really either until this all settles down. By which time there's a risk it'll be heading into suspension anyway!
My facts are clear and I wasn't making a point related to the consolidation. If you held 100 shares at 1p and do nothing about the open offer (which is what I suspect the majority will do), you will hold 1 share at 1p. Meanwhile a further 1 share can be bought by someone who takes up your entitlement under the excess applications. And they will have a warrant giving them the right to buy a further 1 share at 1p at any time in the next 12 months. AND the people who bought 100 pre-consolidation shares in the placing earlier this year will also get issued with a warrant giving them the right to buy at 1p in the next year. AND the people who bought loan notes have a similar right.
To put all that into context, at the start of this year there were 5,160,915,400 shares of 0.01p in issue, equivalent to 51,609,154 new 1p shares. In 12 months' time there could well be 262,827,462 shares in issue. That's over FIVE TIMES the share capital at the start of the year. That is a hell of a lot of shares being issued at 1p. Logically that's surely going to provide a brake on the share price soaring from the 1p (or 0.01p) levels.
That's the point I was making. Nothing to do with the consolidation.
I hope so. As Peer noted recently there could be a huge number of shares about to be issued at the 1p level, all with 1 for 1 warrants at the same price. There’s a risk that will hold back growth. Of course, if they find something spectacular who knows. But there’s a tight deadline and look at what they found last time, when they had longer to do it!
Gumbo given that Gunsynd’s price has gone sideways for a painfully long time now l, if the GUN board is ramping it they aren’t doing a good job of it!
I’ve argued before that (at least) one board is wrong. The main two posters on GUN are an idiot who I filtered out ages ago, and Optimist, who makes no secret of the fact that he is a major investor there. He was in PLMO too but sold out at a big loss when we came back from suspension. I don’t really follow the inconsistency of thinking HH is amazing when running GUN but that PLMO is a disaster. Our planned RTO fell apart and it took way too long to spot it was a duff buy. But at least we didn’t buy it. Better than doing a deal and discovering afterwards it’s awful.
Should HH quit here and let someone else have a go? If he’d rejected it sooner I’d say no, but it did take a while. I guess the major shareholders will determine it - will be interesting to see who those are post the open offer. But the clock’s ticking and if we’re distracted with boardroom battles we won’t find an RTO candidate and complete particulars in the time available.
Either way though, HH isn’t the messiah, nor is he the Antichrist. You wouldn’t think it from reading these two boards though!
I’m long both, but with less than 10% of my portfolio in each just in case.