By Tom Winnifrith, The Sheriff of AIM | Thursday 6 September 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.
Share Talk is a website that takes money from, usually, crap companies. It does not appear discerning. If you are a PLC with a cheque book come on down! It does not disclose its business model and it then provides what it terms “the Independent voice across social media” or what you and I would term sordid share ramping. Shares in Conroy Gold (CGNR) are up 30% today to 13p to sell thanks to such ramping. But before you get too carried away….
Share Talk put a series of questions to Conroy which were so utterly tame that it made Zak Mir or Justin the Clown look like a Git Bay interogator on steroids. As a clue, the first was how will Conroy spend the £500,000 it has just raised?.
Well of course old Prof Conroy did not bother to explain that after costs it was a bit less than half a Bernie but prattled on about how it will be used to develop the company’s exciting assets, which it has been working on without getting anywhere near mining since Adam was a boy. That’s all balderdash. Has Share Talk not been asking the pathetic questions it was paid to ask it would have quizzed old Prof Conroy about the dire state of the balance sheet.
I requote my colleague Nigel Somerville writing after that 13.75p placing on 28 August:
“Or maybe it is just that working capital seems to have been an issue for an awfully long time, and £500,000 still doesn’t leave the company with enough cash to pay its bill over the coming year. After all, its interims to November 2017 showed net current assets of an eye-watering MINUS €3.1 million. It may have raised a million pounds since then, but another half a million still doesn’t balance the books – and we are some nine months on.
By the end of November the company will have to have raised enough to see it through the following twelve months to be signed off as a going concern. In other words, one can predict further placings and/or death spiral finance over the next three months: this placing changes nothing – it is a spoof, the only plus side being that the lights are kept on while more funding is scratched around for. SELL”
Of course Nigel is right. Conroy does not have enough cash to do more than a few scratchings at the surface in its acreage in the border counties of Eire. But it will announce the results of those scratchings as if it has just discovered El Dorado. Then gimps like those at Share Talk will earn their salary by ramping away just to raise more and more cash to support a company happy to employ family members on the board and to live the life.
Those who follow Share Talk are clearly not the brightest sparks or, to be charitable, are just folk who have developed an addiction to losing money on penny stocks, but their buying this morning has pushed the stock higher. Brokers Brandon Hill will be licking their lips as they contemplate many more fund raisings to come. There have been four in the past 12 months ( at 27p, 27p, 12.75p and 13.75p). Don’t expect the next 12 months to be any different.
If the pond life who follow Share Talk want shares make them happy and sell.
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