Morning Mumble (Very brief): In light of the "recommended" offer for MOG Mediterranean Oil & Gas plc by Rockhopper Exploration plc. & Blur Group (I was right)

Am I missing the obvious? As a holder and long on MOG, I should be ecstatic when quite frankly the recommendation is a disappointing factor in the value potential of MOG. The justifications of the alleged benefit and contingency for success in Malta is a a let down to holders whom bought into the value.

A cheap way to get its hands on some decent acreage. If the board think the best value including an all in of around $1.2 a barrel, then I advise parties to write  down the names and make sure they include the under performing recommendations. With cash around £8m plus perhaps some element from LOG for the defamatory comments, the price per barrel drops to a paltry $0.85 there's a zero there folks...I'll remind parties of MOG's own investor presentation. 

MOG Investor Presentation

My view, which is no doubt wrong to the market is, if one wanted Falklands exposure I'd have kept the stock when it was high instead of selling! I dislike all elements of the Falklands its high cost and for me, one to avoid/short regularly. My last thought on MOG goes to the regulator whom perhaps needs to look at the trades late into the day on MOG!

Finally, to what I was commenting on last night! Albeit I missed out on a further 20+ points that's immaterial to what my trading gut was saying. Blur Group Proposed Placing and Open Offer. What a surprise, this sets the trend for a number of stocks, more importantly disenfranchisement will become wide so I will look to short further post the placing news. 

Atb Fraser

Morning Mumble: My "King" doom for a horse...& slow market news!

When investing rule one is the "returns" and "potential." However with King I cannot help but wonder will the world wake up one morning and think: perhaps it’s time to read a book on the way to and from work.

In looking at Zynga's not so stellar performance, 1.0 version of the "Gaming Online Entities". Well, let’s put it another way January 30, 2014 - Zynga Announces Fourth Quarter and 2013 Financial Results results are slightly different to King's recent performance on numbers only but I suspect a similar performance profile for their Farmville Offering as Candy Crush. They tried spinning out different games, but the psychology of humans is well known, simplistic app games are fun "for a while." You only have to look at your teenage children, perhaps even you partner to realise Candy won't be sweet forever. I have resisted the temptation to go on pun-overload.

The rate of decline for games is well versed...so if you were to look at Zynga, I cannot help but wonder if the outlook doesn't bode well for online/app gaming as a realistic long-term venture at 'these prices.' The investment case for short-term trend profits bodes well, albeit people argued that for Apple and Samsung earnings, but the difference being something quite massive, parties are able to see, touch and utilise their purchase, it's tangible. It’s not the intangible offering of paying for an arcade styled mental benefit or challenge that, save for the odd addict, generally disappears as a fad or trend. 

The pricing doesn't appear to be so overcooked as Zynga's, Facebook's or Twitter's however in the short-term there will no doubt be some plus as there's plenty of people to sell the story to. So I’m thinking in the short-term (4 months) there may (will) be a material appreciation for the stock but post the ability to sell the story in any great numbers and the comparisons to previous dividend payments becoming reality the price of stock will be lower post the 1st Quarter of listed results. 

This theory is based on there being parties with significant profits on these IPO's and one suspects wanting to realise some gains. Any limits/lock-ins will bode well in the short-term but post which there's going to be a real depreciation in the share price. 

Candy Crush aka King and Zynga are reliant on primary platforms and equipment to function. Facebook, being the social interaction point of millions is indemnified against these risks (including the access point for these games). Candy Crush and Zynga , without a decent roll out of games that are "not reliant" on offering 'free lives' to the original app are doomed to lower returns but currently based on higher expectations. My trading head offers some lemming style longs for brief-periods prior to the reality kicking in post earnings. Let’s see...

Back to reality and normality, the Chinese are now spooked by defaults, China banks begin retreat from risk. It will have an impact on commodity demand again as the oversupply issue "to the market appears resolved with iron ore going back to $110/t for what reason? Well its common-sense that people, banks and bond traders are waking up to the fact that with defaults being real and the perception of guarantees disappearing the market will become real. Higher financing costs for entities (Risk) that really should not have survived in their own right. Consolidation will lead to contraction as savings need to be made to create 'going concerns'. 

It appears that there's rumours of an 'very well paid CEO' departing to attempt to reduce the scandal and distractions affecting a company that's trying to raise funds to produce oil. I can't think who that person is!?! 

The markets is betting on H&T Group (HAT) to benefit from Albemarle & Bonds position. I'd a liken HAT as the DSG to Comet if ABM go fully to the wall. Declining pledge books (across the sector) which is common after a large increase in sector as people realise there is not much left to 'pawn' or sell. The margins are being squeezed on the purchase price as well, which does not bode well for the companies over the longer term, without a reduction in the footprint of stores nationally. Some may benefit with the eventual close of ABM stores that do not meet a viability threshold or are not acquired. 

It’s a mystery why parties thought ABM's demise came about unexpectedly. The odds of a return for shareholders still holding stock (WHY) is likely to be nil. HAT's 2.5% dividend based on yesterday's SP on may present some welcome relief but my concern is these entities do not leverage well for which HAT are focusing on paying down the debt. The issue remains with regulatory pressure on the higher cost lending market is likely to impact on margins further.

Very slow market news wise for directional plays, save for LMI. As one party points to closing operations permanently which would make sense. When will South African's Miners Unions learn that you can't milk the cows nonstop. They do have to graze... Lonmin PLC Update on Protected Strike Action 05th March 2014 was over 3 weeks ago with little change. As such, the cost implications are going to be significantly higher. Russian issues are predictably positive for Palladium, combined with the on-going strikes, is Palladium going to break its 800$/oz. resistance and tick up to a new range? Certainly looks that way, which should benefit Platinum!

The mockery of "analyst" consensus is being exposed again by the revision of Tin Deficits (Reuters) only a near 7 fold increase upwards. Well there's no prizes to think that the price reacted accordingly. 

Finally, Mediterranean Oil & Gas (MOG) Litigation Update suggests that the judgement will be handed down tomorrow on the case Leni Oil & Gas brought against the MOG Subsidiaries. Now based on common-sense, with MOG's announcement so soon after the LGO relinquishment for $1/£1 (whichever it was) surely meant they took legal advice. Its still very odd for the claimants have not issued any news on this? Perhaps it’s on the basis MOG are? Not long to go before the results...

All the best, Fraser