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It took a year but my "insanity" call on Concha 100% validated

By Tom Winnifrith | Sunday 12 March 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.

Almost exactly a year ago, investment vehicle Concha (CHA) spunked £4 million on a 0.43% stake in new media darling Ve Interactive a deal and valuation that I branded as "insane". Hey ho, today's Sunday Telegraph suggests that the Sheriff of AIM is right once again.

At the time Ve described itself as a: "multi-award winning global technology company offering a suite of apps across a single platform which drives website traffic and reduces abandonment at each stage of the customer journey on the site, including at the landing, browse, basket, check-out and post-purchase stage. This is done through display advertising, targeted overlays and email. Ve services over 10,000 clients worldwide and tracks more than £100m worth of transactions a minute via its comprehensive data-set which provides valuable insights into customer activity. Each of its apps are driven to deliver highly-targeted content to customers based on their purchasing activity and profile."

I described that as gobbledygook, pointed out all the related party red flags, the dire operating metrics and asked what on earth Concha was thinking as you can see HERE.

The Torygraph today says that the CEO has been ousted and it has raised £3 million to stave off bankruptcy at a £300 million valuation. But that will not last long so it is then going to raise another £30 million at £300 million. All of that implies that Concha's stake will now be worth £1.1 million IF the second bailout funding goes through.

At 0.6p Concha is valued at £10 million and must, by now, have net assets of £1.5 million (max). Given its track record such a premium is in no way justified. Sell.

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