By Tom Winnifrith, The Sheriff of AIM | Tuesday 6 June 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.
I have today received a letter from the Financial Reporting Council about a complaint I made about the uber dodgy accounts of drowning in debt heading for insolvency Avanti Communications (AVN). You will remember that Avanti did 2 transactions which generated cash in of nil and cash out of $14 million and booked that as a sale of $25 million on a 100% EBITDA margin.
I argued that this was misleading. Avanti defended its case and has managed to avoid having to restate. However, as the letter from the FRC makes clear it was forced to make changes to the way it presents the matter in its accounts and also to disclose management assumptions which underly this "profit" booking. When those are shown to be ludicrous by events that will be the rope to hang the bombastic prick of a CEO David Williams and his board.
This is not the total victory I had hoped for but in forcing Avanti to change the way it presents this strange transaction it is a win none the less. And it is now the third win I have had with crap AIM companies and the FRC (Eden Research and Quindell being the others).
Once again the FRC thanks me for my efforts. To certain pious share bloggers who have never had any such victories but claim to be pure as the driven snow and question my ethics and what it is I do, I say "fuck you."
As for Avanti, good companies are not forced to represent their accounts by the FRC. My target price remains 0p.
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