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By Cynical Bear | Sunday 5 August 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.
I have a grudging admiration for the stock promoters that inhabit the lower reaches of AIM or the Standard List playing around with cash shells and investment vehicles looking for the next big thing such as Chris Akers, Peter Redmond, Geoffrey Dart etc. Just sometimes it goes spectacularly right and I take my hat off to Adrian Beeston who has pulled off a fabulous heist at Argo Blockchain (ARB).
Tom touched on this recent Standard List IPO HERE when attempting to stag it and then realised HERE that perhaps he should have read the prospectus first. Well, I’ve had a good look through the prospectus and it makes hilarious reading.
To be clear, I don’t know how this all came about but doubt I’m too far out. Adrian Beeston like all good stock promoters must have been sniffing around the blockchain space for a while wondering how to make a few quid and although timing wasn’t on his side with Bitcoin crashing from peaks of $20,000, it didn’t put him off.
Argo has a rather odd, eclectic mix of Founder Shareholders. It feels to me that Adrian was at a crypto-currency conference late last year and just went up to a variety of potential executives and an assortment of consultancies explaining that he was pulling a crew together for a crypto-play in London. The (undeniably compelling) pitch would be that the gang could make £10 million or more in less than a year without spending a penny. Although, strictly speaking, the 90 million founder shares were at 0.1p, the founders never had to put their hands in their pockets as, for all their efforts, the company paid them £95,000 in February, nicely offsetting the £90,000 cost of the shares!
So, to be clear, the following Founder Shareholders ended up with 90 million shares for free:
- Jonathan Bixby and Mike Edwards (Management) – 38,700,000
- Adrian Beeston (obvs) – 12,600,000
- Second Wave Capital – 9,000,000
- Ironport Blockchain Financial – 9,000,000
- August First Ventures – 5,400,000
- White Umbrella Consulting – 5,400,000
- Plum Capital – 5,400,000
- Andrew Frangos (Cornhill) – 4,500,000
I bet at this stage, there was no business plan but with all these bright minds working together, it was no time at all before the never-before-used acronym of MaaS (Mining as a Service) was splattered across various Powerpoint presentations.
In January, Adrian got two further investors on board at 1p, raising £100,000, namely, Pallasite Ventures and Smaller Company Capital, taking the early-stage investors up to 11. Feels about the right number.
Argo then raised a further £2.5 million at 8p and then having made not much further progress got the IPO away raising £25 million at 16p. Let’s be honest, none of the institutions that got involved at 16p have any clue as to whether mining four niche coins on behalf of the public will be a success but hats off to those that convinced them. Those that should be somewhat embarrassed include: Banque Heritage, Miton Asset Management, Hadron Capital, Hendersons, First Equity and Jupiter.
The funniest thing is that, as Tom has found out, although there were some lock-ins in place over some of the early shares, there’s about 17 million of the free ones not locked-up, though Beeston’s 12.6 million are for one year.
I hope 0.1p folks have been cashing in like absolute bandits and walk off into the sunset with a cool million or so looking for the next new idea. With Jonathan Bixby and Mile Edwards presumably being played by Clooney and Damon in the film version of this caper, I guess Adrian will have to make do with being played by Ben Affleck.
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