ShareProphets


The one stop source for breaking news, expert analysis, and podcasts on fast-moving AIM and LSE listed shares


Join ShareProphets at less than 2p per article

> All the big AIM fraud exposés

> 300 articles and podcasts a month

> Hot share tips

> Original investigations by our experienced team

> No ads, no click-bait, no auto-play videos

Find out more

AIQ – Open Offer launched, shares in freefall: keep selling

By Nigel Somerville | Tuesday 22 May 2018


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.


Having made it back to the market after its second suspension (and it only listed in January!), Standard-listed AIQ (AIQ) has now launched the promised open offer at 20p. Meanwhile, the shares have been collapsing from the suspension price of 135p to just 55.5p last seen. So the open offer is a giveaway, right?

Er, no. Wrong. This is an investment company whose only asset is cash – which amounts to around 8-10p per share. At 55.5p, despite having more than halved since the suspension was lifted yesterday, it is still quite clearly overvalued by a country mile.

Both suspensions were caused by a disorderly market and (assuming this has finally been corrected now, although I don’t take that as a given) the stock should eventually drop down to somewhere around 8-10p – in line with its cash position.

Of course, one might want to apply a discount to the cash because there will still be boardroom salaries and plc costs to pay. And I daresay the placing and open offer will have cost a few quid too.

So I don’t consider the open offer to be a potential win: why would you pay 20p for 8-10p worth of (cash) assets? And if you apply for shares at 20p, how long will it take to offload them again? What will the share price be when you can sell the stock? You can bet your boots that it shouldn’t be anywhere near the current price.

On that basis, AIQ is still a standout sell…..not to mention all that has gone before which on its own is enough to have me reaching for my longest bargepole.


Filed under:


Never miss a story.




This area of the ShareProphets.com site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ShareProphets.com. ShareProphets.com does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at ShareProphets.com is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ShareProphets.com and is not intended to be relied upon by users in making (or refraining from making) any investment decisions.


More on AIQ


Comments

Comments are turned off for this article.


Site by Everywhen