By Tom Winnifrith | Saturday 22 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.
At 175p Versarien (VRS) is valued at £263 million. I cannot argue with two writers on this site (Lucian and Cynical) that the valuation looks absurd based on historic profits and cashburn or even on some of the more optimistic forecasts. But it has now announced it is raising £2.9 million (or more) at 145p via Primary Bid and I am almost tempted to have a flutter. Here's why...
I know that Cynical is very, er...cynical about the promotional activities of CEO Neil Ricketts but he does seem rather good at it and has assembled a large bad on devoted followers. I reckon many of them will go for this offer. More importantly there are a stack of bears out there who are short and often well offside - who will be desperate to close. So I reckon this offer will be filled well before the Sunday 5PM deadline with most folks participating either bears closing or believers.
Thus I expect the shares to open not that far off 175p on Monday as any bears who could not participate scramble to close. This is a large enough and liquid enough stock for those looking to make a quick turn to do just that and that is why I would be sorely tempted to join them. Notwithstanding the fact that the valuation is just bizarre.
If you do take part and registered via ShareProphets we will earn a small commisison. It is your call.
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