By Tom Winnifrith | Friday 23 December 2016
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.
I kick off my contribution to the 24 share tips of the year for 2017 that ShareProphets writers will be publishing between now and January 3 with one of the four sells I shall deliver. And I start with the most obvious: sell AIM fraud Cloudtag (CTAG) at 7.125p with a 0p target.
Where do I start with why this is a sell? Well lets go with the fact that despite all the promises of guaranteed sales in 2016, of launching its health wristband thingy in January 2016 and of signing up big name etail and retail partners this fraud has delivered zero sales and zero partners in 2016. It lied about it all.
It currently has cash in the bank thanks to a death spiral with L1. It lied about the terms of that when getting EGM approval and has lied about various terms of its exercise too. But it is at least honest in saying that even after this death spiral is complete it will run out of cash pretty soon into 2017 given that it has no sales and spunks cash at an alarming rate.
And so like all frauds it will, to misquote the greatest ever Prime Minister that this country has seen, "in the end run out of other people's money". And that end will be in the first few months of 2017. To avoid that, Cloudtag needs to maintain an AIM Casino listing so that it can continue to issue a blizzard of shares. Luckily for it, there is a legion of morons, such as semi naked Hayley Whittaker pictured here, who are just gagging to average down and buy more and more shares.
So in theory this fraud could continue. I term it a fraud because it has told repeated lies to inflate the share price to allow it to issue shares to raise fresh capital and that is Securities fraud.
In practice it will not continue because the Nomad to Cloudtag is suffering reputational hara kiri as a result of its association with Cloudtag and also its vociferous supporters like criminal Aidan Earley. Cairn's very survival is now jeopardised by this. Its senior executives can do a google search as well as you and I. And to be fair to Cairn, its senior men such as Liam Murray are not the sort of chaps who want to act for slam dunk frauds. As such it is only a matter of when, not if, Cairn quits as Nomad. And then no Nomad in town will take on this account so the shares will be suspended and then, a month later, booted off AIM.
Without a stockmarket listing, Cloudtag cannot raise cash and will therefore go bust.
It might follow African Potash, another fraud, and apply for an ISDX listing before Cairn walks. That would cost £5,000 and the ISDX lobster pot will accept anyone. But ISDX is a lobster pot. There is no liquidity. Yesterday the value of share trades in Potash was just £330. S you cannot raise any cash there by issuing shares as no-one wants untradeable confetti in a fraud at whatever price you issue it, not even bucket shop spivs. That is why Potash will go bust and that would also be the eventual fate of Cloudtag if it went to ISDX. The transfer would merely postpone death but not for long.
You might have thought that facing certain wipe-out that Cloudtag would have a "buttons" valuation. Au contraire. On a fully diluted basis - whicgh thanks toi L1 will be the same as the actual basis fairly soon - the market cap is c£40 million. £40 million for a company with no sales at all, that commits fraud and lies to investors as a matter of routine, that admist it will be oit of cash soon and whose Nomad is bound tpo quit so losing the company its AIM listing, before long - hmmmmm. What could possibly fo wrong?
I guess that semi naked Hayley, pictured HERE with her semi naked pea-brained twin the Quindell loving Kate, won't be giving up her day job as this is no golden ticket. Shame.
My first tip of the year is to sell Cloudtag at 7.125p with a target of 0p
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