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The extent of short Positions currently outstanding:
Philadelphia Financial Management of San Francisco, LLC PLUS500 LTD IL0011284465 0.65% 2014-06-16
About the Author
AnonymousUser37607
7 comments
AnonymousUser37607
I understand that this particular fund has been short of the US players in the past (FXCM, Gain Capital etc) - not sure if they still hold short positions on these. Philadelphia has been pushing for greater regulation in the US in relation to retail FX trading specifically.
As it stands the short position is relatively small but always worth monitoring
Dale
This is laughable. The poster has been an active and energetic participant in the bear campaign against Quindell, promoting all sorts of insinuations about against the company., with no balance for any positive points.
Fair enough. Free speech etc.
But as soon as there's a bear raid on one of his own pet stocks, he comes over all po-faced, complaining that "the credibility of financial markets (ie AIM) is severely tested and really called into question. "
They don't like it up 'em!
AnonymousUser37607
I could not find any positive points for Quindell - too many inconsistencies in the public disclosures
evoh_1
Huge free cash flow at PLUS unlike other more suitable targets. For me this nefarious at best with parties working together. For instance the institutions buying up PLUS will lend out to famous shorters to make money on lending the share. They then have the chance to acquire yet more shares at a discounted price, forcing out largely private investors.
They might even end up paying these notorious shorters and their mates to help drive the price down until they have filled their boot suitably.
If you were out for a short how about carpetright for instance, they are on a PE of 50 and I have yet to see a single person walk into the two shops that are near me.
evoh_1
Also Heisenberg,
PLUS500 couldn't shift to the main market with ease as their business has changed markedly in the recent past. That was an issue for Quindell with their apparent move the to try and list on the main market.
A move away from AIM is a must, I find the place to be very open to odd price movements far too often for my liking.
AnonymousUser37607
In my view there seems to have been a fair amount of confusion on this point in relation to Quindell. This is what Quindell said in the RNS of 11 June 2014:
“… that it has not been able to satisfy Listing Rule 6.1.3 at this time, and particularly, the criteria in Listing Rules Guidance Note 6.1.3E (5) which states that an applicant may not be eligible if its business has undergone a significant change in its scale or operations during the period of the historical financial information, being the last three years’ audited accounts.”
As a start it failed to satisfy Listing Rule 6.1.3 which covers historical financial information which states under LR 6.1.3R:
“(1) A new applicant for the admission of equity shares to a premium listing must have published or filed historical financial information that:
(a) covers at least three years”
So on the face of it Quindell satisfies this.
However, LR 6.1.3B states that
“The historical financial information required by LR 6.1.3R (1) must
(1) represent at least 75% of the new applicant's business for the full period referred to in LR 6.1.3R “
Therefore, on this criteria Quindell, in my view, would not have been able to satisfy the listing criteria. The reasons for this are nothing to do with how fast or how quickly the underlying business has grown during the 3 year period. What it is designed to ensure is that the presented 3 year track record is a fair representation of the underlying business – in Quindell’s case they have made a lot of acquisitions during the last 3 years so it would have been difficult to for an investor to form a consistent picture based on the last 3 years audited figures.
Under LR 6.1.3C it states:
“(1) In determining what amounts to 75% of the new applicant's business for the purpose of LR 6.1.3BR (1), the FCA will consider the size, in aggregate, of all of the acquisitions that the new applicant has entered into during the period required by LR 6.1.3R (1)(a) and up to the date of the prospectus, relative to the size of the new applicant as enlarged by the acquisitions.
(2) In ascertaining the size of the acquisitions relative to the new applicant for the purposes of LR 6.1.3B R, the FCA will take into account factors such as the assets, profitability and market capitalisation of the businesses.
(3) The figures used should be the latest available for the acquired entity and the new applicant as enlarged by the acquisition or acquisitions.”
LR 6.1.3D further states:
“Where the new applicant has made an acquisition or series of acquisitions such that its own consolidated financial information is insufficient to meet the 75% requirement in LR 6.1.3B R, there must be historical financial information relating to the acquired entity or entities which has been published or filed and that:
(1) covers the period from at least three years prior to the date under LR 6.1.3R (1)(b) up to at least the date of acquisition by the new applicant;
(2) is presented in a form that is consistent with the accounting policies adopted in the financial information required by LR 6.1.3 R;
(3) is not subject to a modified report, except as set out in LR 6.1.3A G; and
(4) in aggregate with its own historical financial information represents at least 75% of the enlarged new applicant's business for the full period referred to in LR 6.1.3R (1)(a).”
The Quindell RNS references “…and particularly, the criteria in Listing Rules Guidance Note 6.1.3E (5)”
LR 6.1.3E states:
“The purpose of LR 6.1.3B R is to ensure that the issuer has representative financial information throughout the period required by LR 6.1.3R (1)(a)and to assist prospective investors to make a reasonable assessment of what the future prospects of the new applicant's business might be. Investors are then able to consider the new applicant's historic revenue earning record… “
“(5) the new applicant's business has undergone a significant change in its scale of operations during the period of the historical financial information or is due to do so before or after admission”
In my view the reason that criteria (5) was not fulfilled has nothing to do with growth in the underlying business but is due to the significant number of acquisitions that Quindell has made within the last 3 years. This is the principal reason why Quindell has undergone a significant change in its scale of operations – it’s the number and aggregate size of the acquisitions. As such I believe this is why it did not meet the criteria for a Main Market listing.
In terms of Plus500, there is no comparison. They have made no acquisitions and the 3 year track financial track record is derived from the same underlying business. The fact that the same underlying business has been growing strongly does not matter – after all growing companies tend to go public. The business has grown organically but it has not changed markedly as its the same business. In all likelihood if Plus500 decide to move onto the Main Market I suspect they would do this off the back of the audited 2014 financials which by then the historic track record comprises the years ended 31 December 2012, 2013 and 2014.
