Member Info for RogueRiver

Declared shorts now down to 7.67%. That's 1.2% of shorts closed in less that 3 weeks.

BP never fails to disappoint these days. The SP is not significantly higher than it was before the 'great recovery'. I bought in at £4.70 in Mar 18 when it was still regarded as a somewhat speculative buy. The only thing going for it now is the divi. It always rallies come share reinvestment time, so you don't even benefit from the crappy average.

Most of the short positions to date were placed from Jan 18. The SP average over this period was somewhere between 600-650p, so I think short sellers will be getting a bit nervous now, given that they have over £200M worth of shares to find. Shorts have already dipped by 0.3% in the last 3 weeks. They probably aren't panicking yet, but I suspect short sellers' stop losses will start seriously triggering when the SP goes above 600p, which can't be far away. If we get a Conservative majority in Parliament next month, I think the SP will soar in anticipation of pretty robust defence spending and confirmation of recently won contracts.

As you say, it could well be a ploy to attract a realistic bid.

From what I have seen in the disclosure RNSs, most IIs are averaging around 300p, so I think they will tell Parkin and Sun Capital where to ram it. 90% of holders need to vote in favour of any bid and, if reports are correct, Parkin can only rely on a maximum of 40%.

It seems the short sellers aren't taking any chances. Shorts are down from 3.6% to 2.3% as of 20 Nov. Always nice to see shorters getting their fingers burnt.

On the other hand...

Given the unusual upward momentum, perhaps there is a short squeeze taking hold.

The Fool article is spot on:

"Debt funding is unlikely. It’s already failed, and when debt holders do not benefit from the upside unlike equity holders, they want secure projects that will generate consistent cash flows.

Equity funding is more likely but, with the company on its knees, nobody is in a rush to offer them cash. It’s better to wait for the company to be down and out then offer a highly dilutive placing, which will likely wipe out existing shareholders.

The only other option is that nobody offers equity and the entire project goes bang. "

Perhaps you could enlighten us as to which part of this does not reflect the reality of the situation?

Glad I bought in again at 58.4p. It may be a crappy share, but the fundamentals are sound enough and 70-80p probably beckons in the next 12 months.

Portends

I predicted a short squeeze when the SP was last in the 570s on the type 31e contract news, back in Sep. Instead, shorts increased. These deceitful short sellers are clearly hoping for a self-fulfilling prophecy. Meanwhile, there is nothing in Bab's fundamentals that potends anything other than an improving market cap.

No probs. I'm not one for conspiracy theories, but I'm not convinced there hasn't been some funny business going on over the past few months to keep the SP artificially low (which would certainly suit Parkin's wish to take the company private). The average of the last year simply does not accord with the performance of the company. Shorts are currently at an all time high of 3.6% and, mystifyingly, they have been rising as the SP has actually been falling to new lows.

Parkin and Sun Capital have to convince the other 60% of holders that parting with their shares is a good idea. Given that many IIs (and a good few PIs) paid around 300p, what's in it for them? Given the growth potential and the increasing yield, I certainly won't be voting for any bid under £4. I don't think I'm alone.

£5 is ambitious but not unrealistic. Any bid has to persuade holders to part with a share that has very good growth potential (e-commerce) and a 5% yield. I don’t think circa 300p is going to cut it.

They would have to bid at least the highest figure the SP has reached in the previous 12 months (i.e. 314p in May). But that seems a pretty conservative figure, given that the real value of this company has been held back by Brexit uncertainty - and it was trading in the 400-470p range for around 15 months in 2017-18. If another bidder (say, DSV) were to throw their hat in the ring, £5 does not seem unrealistic. That would value the company around £500M, which seems reasonable. It's still early days though. Even if no bid is forthcoming, I think a Conservative overall majority in Parliament and a Brexit deal in the new year would almost certainly push the SP toward £5.

Same here RMR. I had a few from the split and topped up at 213p last week. From today's move, it looks like the IIs are starting to pile in. I think the SP will remain volatile, but it will probably stay north of 220p, provided current general election opinion poll results don't change markedly.

Given that management couldn't raise $500 million via a bond sale (at lender of last resort interest rates), what on earth makes anyone think they will be able to raise £470 million from a 'strategic investor'. Surely any investor with £470M to punt is going to have enough strategic wherewithal to wait until CVA/admin and snap up the whole enterprise for that sum.

I think as we get closer to the spring (and the divi) it will climb into the mid 200s. If a circa 5% yield becomes an annual fixture, it will probably top 300p.

I don't think the idea behind Fool is to toe a particular line. Rather, it gives differing advice and opinions and leaves the investor to make up their own mind. Much as we like to pan it, I bet a lot of us are secret watchers - and the site's popularity suggests that a lot of PIs find its articles pretty useful.

Sageman.
Same here. It's investing 101 really. I'm diversified over different companies in different sectors, each company comprising about 5% of my holdings. You certainly don't need to pay a fund manager to do it for you. If you get greedy and plough too much into a single share, it will probably come back and bite you on the behind.

After the occasional foray into speculative shares, I learnt very quickly that there is rarely a fast buck to be made. On the other hand, losing money is a doddle. I've always managed to get out with something rather than nothing (30% being my biggest loss).

My portfolio is pretty vanilla these days. Averaging 5% pa on the FTSE 100 and 250 and the odd AIM share may be a little unexciting, but it doesn't cause any sleepless nights either.

If there is a 'rescue plan' on the way, the best you can probably hope for is the raising of a few £100 million on the back of a two-for-one rights issue ("Let's tap the poor b******s for some more cash"). Even if that works, they will still have to find another £1.5-2 billion in order to get to production. Where are they going to find that sort of money? Perhaps JPM will have a change of heart, but I wouldn't put money on it.

Shore Capital's latest broker rating has it as a 'buy', which to be fair it probably is at 58p. In the event of a Brexit deal it could easily bounce back into the low 70s.

I was assuming you meant 676k in value. If you mean 676k number of shares, then at a 22p average you would have paid around £149k, which would mean your current value is around £20k. Still not to be sniffed at.