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Sell Tern at 26.5p

By Lucian Miers | Saturday 5 September 2015


Disclosure: The author has a short position in one or more of the shares mentioned. 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.


Mug punters in search of get rich quick opportunities on the seedy AIM casino seem to have abandoned resource stocks  for the moment which is no surprise given the price of gold, oil and the general slump in commodities. China Frauds also seem to have lost their lustre.

This has led to a concentration of interest in that other great source of retail greed and aspiration: Technology.

Shares in Tern PLC (TERN) have rocketed of late and even supplanted perennial favourite Gulf Keystone Petroleum (GKP) at the top of the Bulletin Board chat charts, generating at least 400 feverish posts a day on ADVFN.

At 26.5p Tern has a market cap of close to £20 million (if you include in- the- money warrants and Convertible Loan Stock). Not a bad result for a 300 grand investment made a year ago in a concern called Cryptosoft which is what is causing all the excitement.

Cryptosoft is in the IOT and M2M security game. As we all know the Internet of Things and Machine to Machine technology are TNBT (The Next Big Thing) Accordingly Cryptosoft has spruced up its website, attended a few trade shows, been featured on some obscure investment TV channels, and indicated that it is in dialogue with some pretty serious players.

To the retail punter this is an invitation to think, not tens of millions or even hundreds of millions. He is talking Billions here and this is why he is more than happy to pay 66 times more for Crptosoft (via Tern) than was being paid one year ago.

Sadly the competition from Silicon Valley in this popular niche is likely to be somewhat more deep- pocketed and serious. The chances of Tern’s share price regaining sanity is pretty high. High enough to warrant going short which is what I have done.

This article first appeared  on the Nifty Fifty website run by Tom Winnifrith, Steve Moore and Lucian Miers - sorry paying customers come first. To read Lucian's next shorting idea next week and to catch the next value investment share tip from Tom & Steve out shortly click HERE


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