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By Nigel Somerville, the Deputy Sheriff of AIM | Wednesday 5 April 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.
It seems that AIM-listed Advanced Oncotherapy (AVO) is so desperate to get out any good news it can that it rushed out an RNS yesterday morning to notify the market of director buying and got the numbers wrong. Oops. Great work in checking and verifying there by Nomad Stockdale Securities.
Of course, we all know that the Bracknor death spiral facility is causing a few headaches in that Bracknor wants to sell its conversion shares but the share price just keeps on falling towards the nominal price of 25p – below which the company can’t issue shares and thus Bracknor can’t convert and dump.
Since the announcement of the Bracknor death spiral package on 22 February we have seen RNSs notifying investor presentations on 6th and 7th of March – which went down like a lead balloon – as well a publication of a paid-for “independent” research report from Hardman, a “convertible” loan with another finance house (convertible at some ludicrous premium to the current share price, suggesting that the likelihood of that happening is zippo and instead the generous 11% coupon perhaps being the attraction, not to mention the security offered) and yesterday the company rushed out an RNS saying that the Chairman and a NED had been buying shares in the market on Monday.
I guess that the shares hitting a low of 27.5p on Monday – just 2.5p above that all-important nominal price – had nothing to do with the purchase, then. The management is just soooo confident in the company and that is why we should all follow suit. Yeah, right.
Except that in the rush to get this marvellous news out to the merry band of loyal shareholders, the company screwed up the numbers, and had to issue a correction to say that the NED in question hadn’t bought 100,000 shares, it was 75,000 shares. And it wasn’t at 28.5p either, it was at 28.67p.
Oops, and double oops!
The additional 100,000 shares bought by Chairman Dr Michael Sinclair at 28.35p was, mercifully, correctly notified, meaning a total boardroom spend of a bit under £50,000.
That may be a lot of wedge for the likes of Advanced Oncotherapy’s shareholders (and to me, for that matter), but given that these two trousered in excess of half a million quid between them in 2015 (the last set of audited accounts) in salaries, bonuses and other payments, £50k seems like pretty small beer.
Mind you, given that the good Dr Sinclair (Chairman) had £472,319 of that (including over a grand for his health club membership, another seven grand for medical insurance and a whopping £255,000 of bonus) it rather suggests that our poor NED was taking one – or, rather 75,000 - for the team. Perhaps he just sees the shares as stunningly good value, for in previous years he was taking his pay in shares.
Or perhaps the whole exercise is just a spoof to get the shares up so that Bracknor can dump a few more bits of confetti.
With all manner of problems – not least of which a series of, shall we say, “questionable” announcements suggesting the sale of shares in close period as well as while the company was preparing to do a discounted placing and while the market was yet to be updated on the loss of the company’s entire order book, as well as a few issues regarding its (temporarily, until the share price drops below the 25p nominal) death-defying death spiral (see HERE) the Red Flags are flying at full mast.
Personally, I wouldn’t trust anything this company says as far as I could throw one of its LIGHT machines. And since there isn’t yet one available to throw…..
Meanwhile, it seems to me that each of the ramptastic RNSs is having an ever-decreasing effect, with the shares up by just 5% at 30p by the close yesterday. One wonders how long it will be before a ramparama announcement actually sees the shares fall.
Tom Winnifrith may not be around to say it at the moment, but it may come as little surprise to learn that my view is to KEEP SELLING.
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