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By Tom Winnifrith | Friday 2 January 2015
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.
Quindell (QPP) has today issued an RNS which is pure bollocks. Ever keen to help I am happy to provide a translation into English, something which shows both that the new board are as keen to mislead as the old and that this company is up shit creek without a paddle.
The Quenron statement follows in italics, the English translation is in bold.
As stated on 8 December 2014, cash generation remains a key focus of the Group and initiatives to improve the working capital profile of the Group continue to be pursued. One such initiative was concluded on 31 December 2014. As part of this initiative, Quindell has entered into exclusivity arrangements with a third party in respect of the possible disposal of an operating division of the Group.
On 8th December Quenron fessed up that it was only able to remain in business because its banks had not yet pulled the overdraft and following that an opportunistic buyer came in with a low ball offer for one of the few businesses in our group which actually generates cash. In order to keep the banks happy we have signed an agreement to allow this party more time to look at which point it might make a low ball offer. Naturally we will accept any offer because we are desperate for cash even though this is one of the few businesses we own that does or ever will generate cash.
This exclusivity agreement has encouraged the banks not to pull their overdraft facilities and as a result we will be able to pay staff their December wages on January 8th.
In addition to cash generation initiatives that will continue into 2015, the Group is in early discussions with a range of parties interested in exploring possible transactions with the Group relating to a number of its operating businesses.
Because the operational cashflows remain weak & below forecast and will get weaker we are running out of money. As such all our assets are for sale. This is a firesale process and any offers will be accepted.
There can be no certainty that any of these discussions will lead to the disposal of any of the Group's assets.
Once they have undertaken due diligence potential purchasers will realise that they would rather have oral sex with an Ebola victim than make a meaningful offer for most of our 191 subsidiaries which are nearly all utter POS enterprises. We may get a very few lowball offers for the few businesses that have some value – but which we hugely overpaid for. These will be sold to keep the lights on crystallising mammoth goodwill writedowns.
Regardless of the outcome of the discussions detailed above, the Board remains comfortable with the Group's overall cash position.
We have persuaded the banks not to pull the overdraft yet so can meet our immediate commitments including payroll. The Board of Quindell – which previously assured you that Rob Terry was buying shares when he was selling, that the company was going into the FTSE 250 etc. etc. etc. – has not stated that it is comfortable that the business is a going concern as it stands because even it knows that it its cashflow profile going out even a few months is a tits up profile.
We have received the PWC draft report but have not stated in this RNS that PWC is comfortable with the cash position because it is not.
We only continue to trade because the banks have not pulled the overdraft. If you think we are comfortable in such a position you really are stupid but it is a day when no-one is watching their screens so we will say it anyway.
Further announcements will be made as appropriate.
We have not commented on the Christmas Day revelation that our CEO sold a company worth £68.40 (inc VAT) to Quenron for £2 million in cash in January 2014. Our new PR advisors tell us to ignore “the blogger” in order not to bring more attention on the criminal activities we have engaged in. Cenkos will not force us to do anything as it only cares about its retainers and the FCA/AIM Regulation probably have not worked out that January 2nd is a working day and so are still asleep in bed.
We will fess up to the accounting horrors and cash black hole when forced to by the PWC report. If we cannot flog all of our businesses which have any value we will go tits up. If we can flog them then we will be left only with cash consumers and we will go tits up a few months down the road. Rob Terry has sold all his shares now because he knows that this is a worthless POS fraud of a company heading for administration. We hope that mug punters keep buying so that other senior management can dump stock and so that we can keep earning vast salaries for a bit longer.
The stark fact is that Quindell has today admitted that there is a firesale of assets and has not provided any clarity on the cash position as it knows that it is dire or on the status of the PWC report as it knows that will make for grim reading. Sell. Target price 0p.
If you are having trouble shorting Quenron, spreadbetting form ETX will allow you to short and you can open an account immediately HERE
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