Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Cloudbuy and the Equities First Holdings scandal – the EFH deceit starts to unravel

By Tom Winnifrith, The Sheriff of AIM

27 March 2015 01:53

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I have always rather liked Ronald Duncan of Cloudbuy (CBUY) because he has the most excellent taste in music and is also a thoroughly decent man. I am sorry he got dragged into the Equities First Holdings mess and I put that down to naiveté and a desire to purchase a nice house not malice. I am thus delighted to report some breaking news which is good news for Ronald and Cloudbuy but opens up a whole new can of worms for EFH and a few other directors.

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Comments

Lonster

27 March 2015, 03:15

Interesting…it would be good to see EFH taking a hit but we are talking about in 30 months time. Every penny above 33p would be worth £22.5K to Mr Duncan. A nice incentive for the decent fellow.
drunken sailor

27 March 2015, 07:25

The first point to pick up on is the definition of a shorter as someone with no shares but a contractual obligation to buy shares. BBM’s who moan about shorters and people who “sign” e-petitions to ban shorting forget that by going short you actually make a contractual commitment to buy in the future and if that is at a higher price than when you went short tough (VW became the most highly valued company in the world for a short while thanks to that)

EFH can still make a tidy profit buying now – more good news another significant buyer wanting to buy in as a result of the news!

However the decent Mr Duncan should remember that not everyone is as decent as him. I would expect that the UK arm of EFH is a different legal entity to other parts of EFH and therefore could quite easily declare itself bankrupt at the crucial point and the decent Mr Duncan could find there are no shares for him to buy back because there is no company to buy them back from. The articles about non recourse lenders in the US indicate that this is often what happens. Given that EFH UK’s forward business must be either zero or very small, thanks to the superb publicity this site has given it, even if they could pay back the winners out of the money made from the losers and still make a profit, why bother – just siphon all the cash offshore and turn the lights out?

EFH UK still have plenty of time to do this before the first winner might need to be paid out and with no new decent but naïve or even crooked people like the Quindell 3 walking through their door, the elaborate Ponzi is effectively dead.