By Nigel Somerville & Tom Winnifrith | Friday 12 January 2018
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.
Suspended today becuase the market is disorderly, AIQ (AIQ) listed on the Standard list just two days ago at 8p per share, raising £3.6 million. It is a special purpose acquisition company incorporated in the Cayman Islands and formed to undertake one or more acquisitions of target companies or businesses in the e-commerce sector. Er, so it’s got no business at the moment and just £3.6 million (minus costs) in the bank and is now worth an incredible £62.5 million! Bollocks.
You would have thought that the markets would want to invest in a potential business with real profits but this looks like it isn’t even hot air: it’s a vacuum. Apart from a few quid of cash there’s nothing there at all. Nothing. Rien. Nada.
So less than £3.6 million is now worth £62.5 million.
If you ever wanted a sign that extreme levels of irrational exuberance were on show, then this is it.
I cannot think of any reason for the rise – and neither can the board, which issued a speeding ticket RNS today (for all the good it did):
The Directors of AIQ Limited (LSE: AIQ), which commenced trading on the London Stock Exchange's Main Market for listed securities on 9 January 2018 at 8 pence per ordinary share, notes the recent significant increase in the Company's share price. Whilst the Company is not aware of any specific reasons that support this increase, however, the size of the fund raise (net proceeds of £3.6m) and the clean nature of the special purpose acquisition company ("SPAC") may have contributed to this rise.
Er…right: so the clean nature of the cash shell makes it worth about £59 million more than the cash!
And if you wanted a few other warning signs…
AIQ is a SPAC incorporated in the Cayman Islands, formed to undertake one or more acquisitions of target companies or businesses in the e-commerce sector.
So it is a Cayman Islands cash shell. Has someone laid a bet with some bookies that they can get the share price up to £2 or something?!
But there are no Red Flags to be found here – and certainly not at the end of the RNS today, where we are told that the Listing Co-ordinator is some outfit called L&S Group Limited. I’ve never heard of them, although the named correspondent, Ivy Wang, brings up some fine companies in a quick search of investigate.co.uk from her previous role at ZAI Corporate Finance:
Grand Group Investment (GIPO) – slung off AIM after ZAI lost Nomad license
GN Group Limited (GNGL) – slung off AIM, Nomad resigned
Alpha Returns (ARGP) – suspended after Nomad resigned
Univision (UVEL) – still listed on AIM
China Chaintek (CTEK) – slung off AIM, Nomad resigned
Oddly enough, all the above were ShareProphets AIM-China Filthy Forty companies, apart from Grand Group which listed too late.
I’m sure this is all a complete coincidence, and the board of Graham Duncan – independent NED and chairman, Soon Beng Gee (“Nicholas”) – Exec director, Lee Chong Liang (“Marcus”) – Exec Director, and Harry Chathli – independent NED, will all be absolutely fine.
Welcome to the Standard List, fellas – but if you don’t mind I think I’ll steer a wide berth.
PS ( From Tom). And now here is a little hint about why the shares may have roofed it from the man who floated it, Andrew Monk of VSA:
Well a bit of a first for VSA yesterday – we floated AIQ on Tuesday and by yesterday it was up 1000% !!............actually most VSA IPO’s and Placings do perform rather well but sadly nowadays when doing these things investors don’t look at track record but just want to know what bung (sorry pay away) you are giving !!..........anyway on paper I had a small holding and it was worth £100/- !!!.............it wasn’t but felt good but I couldn’t sell my stock as it is in certificate form and still being sent out by the register and nowadays with all the regulation its impossible to sell stock unless you have gone through a DD procedure worthy of a counter terrorism exercise and also have the stock in crest - Dictum Meum Pactum right out the window………..so we have had to suspend after 2 days to allow everything to settle and by settle I don’t mean the share price which is what the UKLA means but I mean our certificates.
Aha, so nobody was able to sell any shares and with no sellers it did not take many buyers to start the ball rolling, then morons clambered on board and still with no sellers the madness went full steam ahead. Now when a few share certs are converted into sellable shares what do you think is going to happen? Why the hell was the IPO allowed to go ahead without anyone being able to sell. This is madness which could so easily have been avoided.
PPS. It appears that through a passive investment vehicle TW owns a few shares. These shares will be sold at the first opportunity!
PPPS Monk clarifies. Not all shares from IPO are in Cert form. SDo some folks can sell ands some can't. Great that sounds fair. But the numbers of those prepared to sell and able is clearly very small indeed., So the point stands. This market is disorderly for a reason.
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