Owning shares in Quindell is like a trip to the Rodeo but is it all bad?

15th May '14 by steamy001

13 comments 38593 reads

Quindell (LON:QPP) has always been an exhilarating share to invest in due to its disruptive nature and complexities that take time to understand, the Quindell land grabbing strategy has achieved so much already since I first invested and comes with considerable potential and history dictates a regular supply of positive news flow from this disruptive company.

Quindell (LON:QPP) are currently traded on A.I.M. in the UK under Epic symbol QPP and are seeking UK Full Listing which the company have confirmed via various communications to shareholders via email is on target for June 2014, the following is a direct quote from one of the aforementioned emails

“The prospectus has already been confirmed as being submitted but yes I can again confirm it has been. If there were any changes to the listing process it would be announced until such time you can assume, as we do, that we continue to target June”

It is expected the company will be added to the FTSE 250 anytime after inclusion to the main listing.

Quindell shares are also traded on OTC under the symbol QUPPF and in France under the symbol M6F, Quindell directors have repeatedly advised they are considering a full US listing and they have attracted institutional investment from the United States of America, this was confirmed to be 16% prior to the investor road show in April 2014 in the US.

US funds and institutions invested in Quindell include investing giants like Fidelity, Aegon, Blackrock, Oppenheimer, River and Mercantile & Merrill Lynch, all of these institutions have carried out their own analysis and due diligence and they all have one thing in common, they have seen the potential in Quindell while listed on AIM the wild west market which is regularly described by one of Quindell most vocal detractors Tom Winnifrith of Shareprohets & ADVFN as “Aim Cesspitt”. As a UK based private investor I thought the Wild West seemed a more fitting description of the UK Alternative Investment market (AIM) and a little less confrontational than Tom Winnifrith’s description of this market, I am sure private (retail) shareholders in Quindell (LON:QPP), Blinkx (LON:BLNX) and Globo (LON:GBO) would agree and…

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Glen Keedy

15th May '14

Hi Steamy
Nice to see someone put their head above the parapet on this one. Tom W has an article today on Share Prophets claiming that QPPs earnings per case will be £1K not the £3.6K QPP claim.
http://www.shareprophets.advfn.com/views/5464/quindell-can-you-please-explain-how-the-maths-stacks-up

Any thoughts on it?
Regards
Glen

steamy001

Hi Glen,

Thanks for your comment, unfortunately I don't have time to read and respond to Tom, as I am leaving for the airport for an extended weekend away and will not return home until Monday, I can also not accept a barrage of abuse whilst away, I do hope another poster has the time to look at it and respond.
Regards

Steamy

AnonymousUser37607

"... during this time I tried to read and take in the detail in the report, after a further 2 hours of reading a cross referencing I personally concluded that I had nothing to worry about..."

Judging by the current share price it seems that many investors are still concerned about recent events. Any chance you could share your analysis / cross referencing that you mention above which quickly put your mind at rest?

shipoffrogs

A few comments Steamy...

"...history dictates a regular supply of positive news flow from this disruptive company."

But little, so far, in the way of positive operating cash flow.

"...seeking UK Full Listing..." and "...Quindell shares are also traded on OTC under the symbol QUPPF and in France under the symbol M6F, Quindell directors have repeatedly advised they are considering a full US listing.."

How does the fixation on full LSE listing and US listing add value for shareholders?

"Gotham made it clear in the document the intended to profit should Quindell’s share price decline, the rapid annihilation of Quindell share price took less than 30mins…"

Doesn't this just reflect that some awkward questions got raised in a badly written document and the market makers began taking the price down and just ran into a wall of stop losses placed by over-extended nervous speculators, and a shortage of buyers?

"Given that those with short position need to repurchase the shares to return them to the original holders a significant number of shares will have to be repurchased at a minimum its 5.16% circa 320m shares to cover the declared short positions but it has been suggested it could be as high as 10% meaning 610m shares needing to be repurchased."

Suggested by whom? I suppose the point you are alluding to here is that QPP might be a buy because of a forthcoming short squeeze and a lack of share supply, but you don't mention the expiry of lock in terms on all the acquisitions the company has recently made nor the company's recent history in adding to the supply of shares.

"Additional pressure on the supply of Quindell shares is expected as they hit the main index with tracker fund purchasing."

The price driven by market dynamics again?

"I personally remain a resolute holder of Quindell shares, and gain a lot of comfort from KPMG having signed off the Audit"

We still don't know when the audited accounts will be published.

"All of the above organisations have faith in Quindell as a result of their audits, due diligence and the fact they combine to spend with Quindell".

These are customers. Their due diligence will look different to that undertaken by investors.

Most of your article fixates on the shorting of the shares and potential new markets (US and UK full listing) for the company's equity.

Ultimately, it's the business fundamentals that will determine the outcome, and specifically the business of generating cash. But it's always struck me that acquisition binges usually end badly for shareholders.

Mark Simpson

Given your personal disclosures that 30min period cost you £2.5m...now unless you are worth £200m+ I don't see why you would risk such a large amount of your wealth on a highly risky share let alone be buying more. I too was surprised by the size of the drop in that time period because I thought the issues with Quindell (LON:QPP) were well known to everyone but it seems that what we both didn't realise was the extent that people were holding Quindell (LON:QPP) purely as a leveraged momentum play. However now that you realise that it was leveraged momentum that was responsible for both the rapid rise and the rapid fall of the share price surely you should be reducing your exposure to take account of the new information not increasing it. Adding to your position seems like a mix of the house money fallacy, anchoring, loss aversion and overconfidence all rolled into one.

TheWatchmaker

19th Aug '14

Why is the word "disruptive" used so frequently as a positive?
It seems to me that this word has more value in Scrabble than it has to the value of the company it is used to describe. I see red flags whenever I see this word in company statements. I suggest it be replaced with the phrase "wing and a prayer".

Why is "shorting" seen as the embodiment of all that is evil in investing?
It seems to me that they are an easy scapegoat for SP drops. If the company fundamentals and potential are solid then the SP will recover.

"In the short-term bulletin board propaganda and rumours either good or bad relating to the share price are best ignored".
How is this post any different to 'short-term propaganda'?.

Good luck to Quindell holders - but personally I wouldn't touch it with a long (or short) pole.

intuitive6191

Disruptive is a word that is used to imply something magical is happening when a company has no apparent business, profitability or reason for existence.

The stock exchange requires that companies do not make any misleading statements to the market. In these circumstances it is difficult to find new non-misleading words when preparing the acres of verbage which are used to promote these questionable stocks.

10th Nov '14

Is there any truth in the rumour that Quindell are outsourcing the release of their RNSs to a pizza restaurant?

Mildly amusing commentary on FT Alphaville today.

On a more serious note Cenkos should be keeping a better grip of this situation in my view. Shareholders are reliant on RNS conforming to certain standards of diligence and accuracy in order to make sensible decisions. The Nomad/Broker has an important part to play in this process. What on earth is happening?

pka

10th Dec '14

After today's news about Quindell's founder Rob Terry dumping most of his remaining shares, followed by a further collapse in its share price, it seems that the answer to the question posed by this article is:

"Yes, it is all bad."

Paul Scott

13th Dec '14

QPP - dismal failure. The Balance Sheet gave away all the tricks of the serial trickster behind it.
I warned everyone here from Dec 2012 onwards. Stockopedia should be incredibly proud of the independent editorial here in my morning reports, which flagged up all the risks to investors a long time before anywhere else.

From Dec 2012:
http://www.stockopedia.com/search/nodes/blogs/?q=QPP%2520Paul%2520Scott&page=1&sort=date&seq=ASC

If the Balance Sheet don't look right, there's a reason for it.
The Balance Sheet tells you where the bodies are buried.

I'll be doing a masterclass on this topic with ShareSoc in Feb 2015. Simple stuff. But amazing how clever people often ignore basic & incredibly obvious signs of wrongdoing.

There was never anything hidden with QPP. The accounts were an obvious fiction from Day 1. People CHOSE to believe them.

Regards, Paul.

Paul, very well done indeed for flagging up the risks of investing in QPP as early as December 2012!

17th Dec '14

According to the Motley Fool, Quindell looks set to receive a class action lawsuit from shareholders. Can any Quindell shareholders confirm this?

Owning shares in Quindell is like a trip to the Rodeo but is it all bad?

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Steamy001

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