Good morning!

It's a typical Monday morning - make a coffee, delete last night's Tweets, then brace myself for whatever horrors the RNS has in store. Today, the main headache comes from Spaceandpeople (LON:SAL) unfortunately, so I'll dissect that one first, below.

Incidentally, apologies for Friday's report failing to get off the ground. This was due to a complete lack of interesting announcements. A secondary reason was that my largest personal long position, in TWTR shares, delighted me by zooming up 20% on preliminary takeover approaches said to be from both Salesforce and Google. Other companies are also said to be interested. So I had to abandon my post here, and focus on that - whether to cash in, or buy more?

I ended up buying Call Options, which can be a nice way to play large cap takeover situations - limited, and precise downside (if it goes wrong, they expire worthless), but potentially exciting upside if a bid does occur.

There's an interesting section in the book, The Big Short about this. One hedge fund made a small fortune by spotting situations where call options were mispriced, in binary type situations (i.e. a takeover bid will either happen, or won't). As with most things in investing, easier said than done. Maybe they just got lucky?


Spaceandpeople (LON:SAL)

Share price: 28.5p (down 28% today)
No. shares: 19.5m
Market cap: £5.6m

(at the time of writing I hold a long position in this share, unfortunately)

Interim results, 6m to 30 Jun 2016 - the market cap here is now so small, it's well below my usual cut-off of £10m. However, as it's a share that I covered extensively in the past, it makes sense to update on the latest disappointment. I think an honest appraisal of mistakes is actually more important than crowing about the winners. Everyone makes investing mistakes, it's unavoidable.

Interim results here don't look great, but they're not a disaster either. The company makes its profit over the Xmas period, so interims are not particularly important. Key figures;

  • H1 loss before tax (continuing ops) of £174k (down from £62k profit in H1 2015)
  • £552k one-off hit from closing down S&P+ (we already knew about this)

This doesn't seem to justify a 28% drop in share price. So I'm wondering whether it's time to buy some more?

Outlook comments are concerning though, and…

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