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Tomco Energy; how much longer will the LSE ignore forward selling of placements?

By Ben Turney | Tuesday 7 October 2014


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.


Tomco Energy (TOM) is not a company I have researched. In fact, I don’t really know anything about Tomco other than one fact. Its placement on September 26th was forward sold. Just look at the chart below and it is clear as day what happened. In the year leading up to September 17th, Tomco traded in an end of day close range of between 1.1p and 1.675p. This valued the business at between £20.5million and £31.3million. Suddenly, on September 18th, Tomco’s share price started to nosedive. In the space of a week it dropped roughly 25% to close at 0.82p on September 25th. The following morning, I imagine to the shock of most ordinary shareholders, Tomco announced it had raised £1million (before expenses) at 0.5p. Apart from the wanton destruction of shareholder value, what is saddest about yet another sordid little episode on AIM, is that whoever is behind this blatant market abuse cannot be remotely bothered to cover their tracks. They know the AIM Regulation team will pass the buck and say it’s not in their remit to investigate. They know the FCA will do nothing about this. They know no one will be punished. How much longer will the London Stock Exchange sully its reputation by allowing this wretched behaviour to go on?


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