Member Info for RichTheNewbie

I seriously doubt anyone is shorting this. I reckon you'd find it pretty difficult to find anyone who'd let you for a start!

There's an awful lot of people trying to convince people to hold or buy this...that's what you should really be wary of.

This company, in cold hard RNS fact, is about to wipe out the shareholders to next to nothing (at the equivalent of 0.1p)....that's a fact.
Shareholders don't get a vote on this, only the bondholders do and they're the ones going to receive 95% of the company, so you can guess how that vote will go.
This is unless something miraculously happens to stop this process....and a lot of people are pinning blind hope on "Crystal Amber", which seems to be a poorly performing fund, worth less than £100m, and certainly not enough free cash to do anything. So they'd need to find a shedload of money from somewhere else if they were to save the day somehow. Maybe they will be seems very unlikely.

So, who's in the right, people saying buy/hold a company that's about to pretty much wipe out its shareholders barring a miracle, or the ones saying to sell? Seems rather obvious doesn't it.....

This is the thing I don't get.....people seem to be banging on about Crystal Amber riding in to save the day...but from my Googling all I can see is:
- A fund that's worth less than £100m in total and not performing very well imo ( https://uk.tradingview.com/symbols/LSE-CRS/ )
- Seems to be run by a former Schroders analyst (Bernstein) and a lawyer. Bernstein seems to be a technology investor. His other venture capital firm seems to have had a decent start with one investment going well, but that was about it, and is worth less than it was about 15 years ago.
- They seem to call themselves an "activist" investor.....but then we can all call ourselves that. Rather depends on whether you have the financial clout to back it up (and/or expertise to make a difference). Based on the above I'm not sure they have either.

Is it not possible that, using Occam's Razor, Bernstein (CA) isn't an oil expert and basically made the same mistake as every other investor in this, in believing the hype about what's down there and how extractable economically?

Its quite easy to run the numbers and spot opportunities on resource companies based on docs that they or their "independent" consultants release.....then the reality of the situation on the ground - or in the ground I should say - means that all your calculations/forecasts are worthless.

Also, it offered me a deliver window starting as early as under 2 hours from when I clicked buy....quite impressive.

Rather interestingly, I was just buying a couple of boring things on Amazon, and I noticed it prompting me, on the front page of Amazon, that I can get free same-day delivery from Morrisons (over £40).

Wasn't intending to buy any stuff from Morrisons today (and there's not one near enough that I'd travel to in-person these days :p) but I do like their produce and I've ended up getting a delivery of stuff that I could have bought elsewhere, but this just saves me a trip (and probably some money too - as their prices are decent).

Not everyone will click and do this....but some will...and ignoring the initial business. A proportion of those who do will realise their produce is probably better than they expected and at a good price.

It's not an absolute certainty that all is lost....there's still a tiny chance there'll be some last minute magic to save shareholders.....but you'd probably get a lot better odds by just sticking your money on a random number on a roulette wheel (and a much better return too).

shaf5 - probably because the market makers and brokers were offloading as many shares in this dead duck walking to as many plonkers as they could find to buy it. They could have justifiably dropped it to 0.15p.....but why bother when you can find people to buy (for a day at least) at 1p instead!

Malcy doesn't get taken in. Malcy gets taken for lunch.

casapinos - I've seen this happen before on shares that are screwed (and been the one confused it wasn't down more). Often gets there in the following days/weeks though. I've not got a position here and I'm certainly not going to take one. So I hope you're right for anyone invested's sake. So, if you've got money on this, I'd contact the company immediately and get them to issue a correction IF you're right! I fear you're not though or it would have already been corrected!

In a few weeks the "takeover" will have already happened....they're getting 95% of the shares at 0.1p each.....

HeresHopin - lol snap.

casapinos - or the market is simply letting their mates escape whilst dumping on PI's.....

If the RNS means what you think then that's a GIANT error and should have been immediately corrected (and a lot of people would have reason for complaint if they traded upon it).

I suggest you contact the company or their representatives immediately because that's quite a difference - seems just wishful thinking to think it's just worded badly.

Beats me.

"The main components of the Restructuring are as follows:
· The Company will execute a debt for equity conversion, which entails (amongst other things):
o A $50 million release of the principal amount outstanding under the Convertible Bonds in exchange for the issue of ordinary shares in the Company (the "Exchange Shares") comprising 95% of the fully diluted pro forma equity of the Company immediately following the Restructuring."

$50m in exchange for 95% of the company. Shareholders left with 5% of the company not 50% when it's done.

I honestly think some people just buy anything 50% down because they think it will recover 10-20% for no reason.
They probably haven't even read the RNS to realise that this is on course to be diluted by 95% at 0.1p

In a few weeks time someone is going to buy 95% of the company for 0.1p per share.....and you want to buy now for 0.95p???

How do you reach the conclusion Crystal Amber have the money to save them?
Do they even have any meaningful amount of spare cash at all?
Their entire fund is worth about £100m, across all their holdings, at the moment.
They'd have to sell all their other holdings (not going to happen), or find some money from thin air, surely?
Doesn't really seem like they have the clout from what I'm googling...

calamari - Yup. One could try to cling onto that hope, but that would firmly be in the category of heart over head, and not a sensible gamble to hold or buy, in terms of risk/reward.

This is terrible advice. You need to read the RNS. Assuming this restructuring concludes you will need your shares to rise around 1000% just to get back to this price.
So if you think it can do over 1000% after the restructuring you might make some money. Or if this restructuring doesn't happen (who's going to stop it?) you might still make money. Otherwise you're not.

At least you can still sell above 1p for a stock that's worth about 0.1p based on that RNS.
That opportunity probably won't last for long though....
Just to spell it out, again, the current MCAP (at 1.2p) is roughly £24m.
The company is being valued at £37.82m in this transaction, meaning the 5% that current shareholders would be left with, is worth about £1.9m, let's call it £2m.
So, right now, you can sell shares for 12 times the value they're about to be sold for.........

If you're buying this you're insane.
$50m for 95% of the company means shareholders are left with 5% of a company that's being valued in this transaction at $52.63m (£37.82m). This equates to a value of 5% of £37.82m now or £1.891m.

So if you're buying now you're paying about 15 times as much as the people in this transaction!

strictlyinc - the market seems to love rotation at the moment. Seems like you used to get sector rotation once every year, or few years, now it seems to happen within a few days, as the money just washes from one group of stocks to another.