Good morning! A reminder that it's Mello Beckenham tonight, with some places still available, David tells me. The theme tonight is high yield investments, with various briefings from people familiar with particular niches, e.g. P2P, high yield bonds, shares, etc. More details & booking info here.

Premaitha Health (LON:NIPT)

Patent infringement proceedings - not a company that I'm familiar with - it seems to be a blue sky drug development company. The shares are down 34% today on a worrying announcement about proceedings being issued against the company for alleged patent infringement. I don't like the sound of this, so will be steering even more clear than I normally would for blue sky. My biggest losses are always on the blue sky stocks, and it's better to just avoid them altogether, in my view. The failure rate is absurdly high.

AO World (LON:AO.)

Share price: 180p
No. shares: 421.1m
Market Cap: £758.0m

Director sale - there are two announcements from electrical goods etailer AO World this morning, one being a standard form to disclose that the Chairman, Richard Rose, last week sold 5,583,475 shares in the company at 180p each, banking a whisker over £10m. Lucky him!

However, the company has, in my opinion, made a mistake in issuing a second announcement where they try to put a positive spin on something that is quite obviously very negative, saying;


He only has 723,443 shares left, so the truth is that he sold 88.5% of the shares he held! Doing so after the shares had already dropped a lot, is clearly sending a signal that he thinks there are better places for his money. Trying to put a positive spin on that is ridiculous, and in my view has backfired.

My opinion - I currently have no position in this share, but am considering whether to open a new short on this one, having recently closed my existing short after the big recent plunge. In my view this stock remains significantly over-valued. It's a very low margin box-shifting operation, via a website. There is loads of competition. So why the premium valuation?

Whilst CEO John Roberts is an utterly brilliant PR man, and spins a wonderful story about great customer service, etc., the reality is that applying great customer service (which…

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