Cloudbuy is “a United Kingdom-based provider of an integrated software platform for e-Procurement and e-Commerce for the trading of goods and services between purchasers, such as public sector bodies and their suppliers, along with the analysis and coding of spend and product data.”
I had only been vaguely aware of it, although I undoubtedly suspected it to be total junk. Paul Scott noted in his report on 11-Sep-2015 (http://is.gd/Ns0Slw) that its listing had been suspended due to the resignation of its Nomad. His verdict:
This company doesn’t really deserve to survive – it’s had long enough to make its business model work, and has squandered so much shareholder cash, that perhaps it would be better if it’s put out of its misery? So management probably have one last chance to make their impressive-sounding, but commercially poor business model actually work, in the next few months.
It resumed its listing [on 05-Oct-2015] , closing down 27.7% to 13.55p as at the time of writing. Ouch.
The company also issued a couple of other RNS’s. One was an announcement (http://is.gd/HSIA3N) that:
Ronald Duncan, Chairman of cloudBuy, has terminated and settled with immediate effect, the share sale and repurchase agreement (the “Repurchase Agreement”) first announced on 27 October 2014, between Equities First Holding LLC (“EFH”), himself and the Company.
Accordingly Mr. Duncan is no longer interested in the 2,250,000 ordinary shares that were transferred to EFH pursuant to the Repurchase Agreement announced on 12 November 2014.
As soon as I read “Equities First Holding”, I realised that this company was doomed with a very high degree of confidence. A sale and repurchase agreements like this is a form of “equity death spiral”, which, as you can imagine, does not end well.
There was also an announcement (http://is.gd/obVHu1) of a director purchase:
Ronald Duncan, Chairman of cloudBuy, has purchased 50,000 shares of 1 pence each in the Company at 15.4 pence per share for the benefit of his SIPP.
So, that is a purchase of less than £8k. No doubt this is an attempt to send a bullish signal to the market. Contrary to this, I interpret such a small purchase as an extremely bearish sign.
I also note that there is an RNS issued on 09-Sep-2015 (http://is.gd/YZl7tv):
the release of its half year results for the period ended 30 June 2015 has been delayed
This is another bearish signal. Companies with…
