By Tom Winnifrith | Friday 10 March 2017
Disclosure: I own shares in one or more of the stocks 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.
Heading to zero, serial liar Advanced Oncotherapy (AVO) has today called a GM to approve the issue of a blizzard of shares to obliterate its share price via death spiral. More on that later but the documentation throws up another issue other than the lies refered to earlier HERE, why will Advanced NOT come clean on short selling by death spiral provider Bracknor.
On 24 February when announcing this ruinous deal Advanced stated via RNS:
Bracknor is prohibited from short selling ahead of any conversion notice, being the notice given to the Company that Bracknor wishes to convert the loan notes into AVO shares.
A lot of folks read into that that there would be no short selling by the fiends at Bracknor. Of course there will be and so today we got a partial admission:
Bracknor has undertaken not to short sell (as such term is defined in the EU Short Selling Regulation (Regulation 236/212)) Ordinary Shares during the Commitment Period, provided that Bracknor may short sell up to 120% of the number of Ordinary Shares to be issued upon a conversion of Notes or an exercise of Warrants between the date such conversion or exercise is announced on a Regulatory News Service and the date such conversion or exercise takes effect.
Aha. So in fact it will be short selling. But of course it gets better. Now a reminder of the maths.
Bracknor needs to advance £95,000 cash for each £100,000 loan note. When converting a loan note of £100,000 it bags an extra fee so gets £103,000 in shares. Last time it announced it had converted at 57p. It then rattled out sales as soon as that notice had been sent to the company ( not published via RNS) - we do not know the time gap. We now know that it was able to short sell up to £120,000 of shares. As long as it managed to get out at 52.57p then it is ahead. But the beauty is that it will have dumped another £20,000 at something in the 50s which is a clear forward sell, a short. As the death spiral drives the stock lower and lower that short will be very profitable.
Rinse & Repeat. Bracknor is going to coin it in as the share price collapses.
And that is why these shares are heading down to peanuts.
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