From £6.99 per month
ShareProphets
The one stop source for breaking news, expert analysis, and podcasts on fast-moving AIM and LSE listed shares

MINDING THE LSE’S BUSINESS

Join for as low as £6.99 per month

With ShareProphets’ membership, you receive:

• All premium articles

• Tom Winnifrith’s Bearcast

• Access to all the entire nearly 10 year archive

• ShareProphets Daily Newsletter

Vast Resources – wants shareholder approval for more value destruction: vote NO at GM, let's end the gravy train now!

By Tom Winnifrith, The Sheriff of AIM | Thursday 22 April 2021


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.


In 2008, shares in Vast Resources (VAST) traded at 24.6p. Today they trade at 0.082p. In other words, those running this company have, while trousering multi-millions of pounds in fees, managed to destroy 99.67% of shareholder value. While many companies do badly for shareholders, the trick here is to keep the company going so more fees can be extracted as part of an ongoing shareholder screw. Now the board wants shareholder permission for more of the same. I urge shareholders to say NO!


The company’s share price has now fallen below the nominal value of the shares (0.1p) making it impossible for Vast to issue any more equity. The company has thus called an EGM to approve a 100 for 1 share consolidation.  It blathers on about how having 21.3 billion shares in issue is deemed inappropriate for AIM companies which is bollocks as issuing confetti like it is going out of style is exactly what most AIM sewer companies exist for: it is their primary purpose. The company also says that the capital reconstruction will make it easier to pay dividends. Yeah right. Just like me chopping my right leg off will make me a pushover when Cheryl Cole tries it on. Whatever Vast says…


The real reason is that, if one assumes that the share price goes up by anywhere close to 100x as it should, ceteris paribus, the stock will once again trade at a big premium to par so allowing Vast to issue more new shares once again.


One former director – Mr Brian Basham – writing to the bogus Sheriff of AIM, Marcus Stuttard of AIM Regulation, put it thus on news of this consolidation:

I have drawn your attention on multiple occasions to the the serial abuse of AIM that is represented by Vast. The company has raised some £100 million for zero return to shareholders, whilst Roy Tucker and Andrew Prelea have enjoyed a rich living.”


And what exactly do shareholders have to show for that £100 million raised? A market cap of £17 million which, itself, is far too high on fundamentals.  This is a disgrace. If the May 5 EGM votes down the reorganisation then the company will not be able to secure funding and will go bust.  But that is what shareholders should vote for. Their holdings are almost all virtually worthless so why not get it all over with and at least the boardroom greed can be ended once and for all.


I call on Vast shareholders to vote by proxy against all resolutions at the EGM.

This story is available to all readers
ShareProphets is reader-supported journalism

Become a member starting at £6.99 per month for all articles, the Bearcast, and our seven year archive.


Filed under:



Subscribe to our newsletter

Daily digest of our latest stories.



Search ShareProphets

Market News

Complete Coverage

Recent Comments

That Was the Week that Was

 

CTAI

Catenai – monster dilution

Time left: 17:34:03