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By Tom Winnifrith | Thursday 29 January 2015
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.
The two leading bear raiders in London, Lucian Miers and Evil Knievil do not always agree but right now both have Quindell (QPP) and Avanti Communications (AVN) as their largest two shorts.
The two men dismiss as utterly spurious the idea that QLS can be sold for anything approaching its reported asset value and regard Quindell shares as a one way bet ahead of the publication of the PWC report in three or four weeks. Both believe – as do I – that PWC will show prior accounting policies to be wholly fraudulent and that the resultant red ink will more or less wipe out Quindell’s stated balance sheet. Moreover PWC will lay bare the cash crisis that threatens to send this company bust.
Avanti’s defenestration may come rather sooner with interims of February 5th. The expectation here is that this will again show that HYLAS 1& 2 are not generating cash and that the balance sheet is a trainwreck. Will Avanti be able to confirm that HYLAS 3 will go ahead at all? Given the state of the balance sheet, Evil considers it possible that there will be a last gasp attempt to get a placing away before the share price crashes to earth like an under-utilised satellite.
A new entrant on the Miers short portfolio is Hurricane Energy (HUR). The bard of the Boleyn considers it highly unlikely that in the current climate it will be able to realise any value or even to demonstrate value with a farm in deal on any of its North Sea acreage. And thus the cash will just wither away. As will the share price.
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