Good Morning,
A bizarre event when you read an RNS and think, is that
exactly what I've been saying (self-admittance) of a company in dire straits.
PLUS announce that Playtech (PTEC) are buying them for 400 pence per share. Shareholders have no choice, there's
significant warnings in the RNS (bold is an addition):
- On 18 May 2015, Plus500 announced that the UK Financial Conduct Authority ("FCA") had required a review of its Anti-Money Laundering ("AML") financial sanction systems and other related regulatory controls which led to Plus500UK Limited ("Plus500UK") prohibiting all transactions for existing customers until additional AML procedures have been completed. As a result, Plus500UK ceased on-boarding new customers.
- Further to this, recent events and associated publicity have meant that Plus500 has become the subject of increased scrutiny and has received additional requests for information from its regulators in the jurisdictions in which it is licensed. Whilst Plus500's products, technology and marketing skills remain strong, the recent regulatory scrutiny placed on Plus500 has highlighted the advantages of expanding the operational infrastructure to support a business of its size.
- Playtech intends to provide Plus500 with access to its market leading technology and infrastructure, in combination with its expertise of operating a multi-jurisdictional regulated business.
- Plus500's Board now expects group revenue for 2015 to be lower than in 2014, with margins expected to be significantly lower due to maintained marketing spend.
For those unhappy PLUS holders considerably higher, what are you unhappy with? You've been saved! The market has kindly reacted to PTEC with some short-term profits, with PLUS overshooting as some buy back, almost LFL to the shorts on PTEC. Akin to QPP, whom in my typo and CwC’s offering was more accurate than realised!
The price is either too expensive or shrewdly timed. PTEC are obviously betting on lower churn and think they're able to mitigate the damage by a typical public house like "under new management sign." It would appear they're now prohibiting all transactions until AML procedures are complete.
Apparently because of publicity, PLUS 500 have come under
increased scrutiny, which its more than probable they should have done at the
start. Worse, is a complete admittance that PLUS is lacking the expertise
of operating a multi-jurisdictional regulated business.
Time for some rereading of those broker notes that were significantly
lower that today’s guidance would suggest, was it Liberum (admittedly house).
The plus (poor I know) is everyone should have made money, the shorts and the
longs (a rare occurrence). Simply, if shareholders reject this, they're
stuffed!
Does this corporate action remove the need for PLUS to give
a profits warning substantially outside of what has already been suggested? The
most notable statement from plus is the absurd commentary "Whilst Plus500's
products, technology and marketing skills remain strong, the
recent regulatory scrutiny placed on Plus500 has highlighted the advantages of
expanding the operational infrastructure to support a business of its
size." So all those shorts run over to PTEC to dissect and
analyse the "potential benefits" with some easy money when the shorts
ran to the door 400+ on PLUS!
Its been some time since Beowulf (BEM) was looked at, with
the tin likely to be rattled soon EMC:
BEM 1 December 14. The announcement would be encouraging had iron ore been
near the $90/t (circa), without a surplus in the iron ore industry and China
going hell for leather.
BEM's Kallak project would be somewhere near viable, perhaps
in 5+ years. With near £180K cash left post deduction of liabilities, there
"may be a need for some cash in the meter to keep the lights on!"
Thankfully, shareholders in the last placing can look forward to the prospects
of BEM advancing "other value creating opportunities."
Its with some sadness that Bill Humphries is stepping down from the board of
Patagonia Gold (PGD). Perhaps retirement or other opportunities. PGD directors have
on the most part kept skin in the game, supporting the company even when the
market has been against them. I've never met Bill or anyone from PGD, but all
the same, AIM have lost a decent fellow. Admittedly their chart looks like an
admirable piste, but perhaps some potential?
Aureus Mining (AUE) announce first pour at the Liberty Gold Project, as
expected earlier in the month, EMC: 11 May 15, the shares have responded positively, but
there may be some more in there yet. As always, its wise to close the higher
risk positions into rises and leave the longer-term monies to work.
Surely not, hook line and sinker, Fishing Republic, a fishing business with 7 shops and online presence. With a resilient market, consolidation is going to be difficult, but one perhaps to follow with admirable plans, whether they turn out to be a tail or not is another matter!
Over to Northland Capital, with 72.5% held tightly by family, its a tiddler (I know) with potential volatility, perhaps even potential if acquisitions are priced well/in non-dilution form (possible?). The fishing market should not be ignored, with a die-hard following.
Limited time for the Gulf Keystone (GKP) appointment that may puzzle a few nor the Sunrise Resources (SRES) "Bonanza", which if one was suspicious would now be followed by a placing. The grades are good, but bonanza? They're chip samples! Some more time needed on Sierra Rutile (SRX) positive results of Sembehun Dry Mine study.
Atb Fraser
