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Fitbug placing - how the spivs of the AIM Cesspit operate

By Tom Winnifrith | Wednesday 25 January 2017

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.

Today AIM listed serial disaster story and cash guzzler Fitbug (FITB) has announced that it has raised £1 million at 0.2p. The shares have crashed to 0.19-0.2p on the news ( a fall of 26%) but if one looks at the trades you see the sordid underbelly of the AIM Cesspit in full play.

You may remember that shares in this company soared to 0.9p, gaining 300% + in a day, just a week ago after it announced a very small order, so small that it was deemed worthy of only an RNS Reach - that is to say it was not material. The shares were then suspended and then the company served up a grim trading statement which made it clear that it would have to place again. The shares started sliding.

The new shares from today's placing will not be admitted to the AIM Casino until 2 February but is that stopping flippers from forward selling? I bet they were forward selling yesterday ( which would also be insider dealing). But look at the trades today. While the bid was at 0,2p there were stacks of material sellers at just a smidgeon over 0.2p, taking their turn as fast as they could. But what stood out was a 2.5 million share trade at 0.192p while the bid was 0.2p. Was that some who had taken part in the placing but perhaps shared the commission with the broker or indeed taken it all ( it happens) so was selling at a nominal loss but an actual break-even or small gain? I'f love to know.

The cash raised by Fitbug ( a net £900,000-£950,000) will not be enough to see this joke company through to the ever receeeding spot on the horizon that is cash breakeven. This placing was for flippers only. They thank the Lord for the strange price movements of recent days which will see mug punters sitting on vast losses, and make a quick turn. Now they rush for the exit ahead of the next bailout placing in a few months time.

Rinse and repeat. Rinse and repeat.

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