By Tom Winnifrith, The Sheriff of AIM | Friday 17 June 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.
Highlands Natural Resources (HNR) is a scam and its advisors are clearly rattled. Panicked phone calls came in from its PR last night as the shares continue to slump. That is testimony to panic and today we have an announcement of a repricing of the dodgy covert placing which is quite simply another enormous stain on the reputation of the AIM Casino. It shows what a POS Highlands is.
You will remember that an unnamed institution, lets call it spiv, agreed to buy the 30 million 25p warrants issued to the owners of DT a month after it was set up by Highlands Natural. You will also remember that the owners of the start up that was DT - who also got shed loads of shares in Highlands Natural as part of this deal - happened to be the CEO and other main man at Highlands. How cosy.
Earlier this week Highlands said that the spiv would buy the first tranche of 10 million warrants at 5p then the rest at 10p + a formulat based on the shares being 55p + which they wont be so lets call it 10p.
But Highlands shares have slumped to just 27.5p. I believe that this is largely down to the spiv selling, or trying to sell, 10 million shares knowing that he could simply exercise warrants. But the collapse to below 30p ( 25p + 5p) appears to have prevented the whole deal going through ( ie the seling of the 10 million shares0 so now we are told that the spiv is paying DT just 1p for the shares and has exercised his 10 million option.
One can safely assume the spiv won't appear on the share register since he knows this is a crock of Turkish and he is just there for the risk free trade. He will have made a good killing - my guess is 6-10p per share so call it £600,000-£1 million, Highlands will get £2.5 million to spunk on rubbish deals and pay huge PLC overheads and everyone's happy.
Highlands is still blathering on about trousering £7.5 million but that depends on all 30 million warrants being exercised. It states:
In return for accepting a lesser price for the first 10 million warrants, the options that the Institutional Investor has to acquire Diversion's remaining 20 million warrants have been re-priced in Diversion's favour. These warrants can be acquired at a price equal to 10 pence per warrant plus 50 per cent. of any amount by which the Highlands share price on the day prior to exercise exceeds 51 pence. All other terms of the arrangements remain as previously announced.
So that means for the next tranche to be exercised the spiv needs to be able to forward sell at 35p plus. Hmmm...that ain't going to happen soon.
You have to ask why, when the shares were 80p just a few weeks ago, DT is now prepared to lose 10 million warrants for just 1p a pop - netting it only £100,000. That won't keep its lights on for long. The reality is that Highlands knows the game is up and so with their Hoighlands hat on rather than theur DT hat, management have reworked this deal to ensure that the PLC has more cash to spunk.
Investors saw with the bogus Helium deal two days ago that this company just talks ramptastic shite. And so Highlands is getting cash in while it can.
I have put a number of allegations of firther matters to Highlands and await its response. This stock is a sell down to TNAV and below which will be - perhaps - 5p per share. Keep selling.
Never miss a story.
This area of the ShareProphets.com site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ShareProphets.com. ShareProphets.com does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at ShareProphets.com is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ShareProphets.com and is not intended to be relied upon by users in making (or refraining from making) any investment decisions.
Comments are turned off for this article.
Search ShareProphets |
Stock market news |
Recent Comments |