Good morning!

Globo (LON:GBO)

Shares suspended.

(I hold a short position in this share)

Update - I wouldn't normally comment on a share where I hold a short position, but seeing as this one is suspended, probably for some time to come, then it's an exception.

Today's update doesn't really say a lot, other than;

  • The company has reported the situation to the police in the UK, Greece, and Cyprus
  • The FCA is investigating the situation
  • Shares remain suspended

What everyone really wants to know, is whether there's any cash left? It should be possible to ascertain that within 24 hours, just by contacting the various banks where deposits and loans were held. So I don't understand the delay on this point.

Personally I'd be surprised if there is much cash remaining, if any, but time will tell.

My archive on Globo - I thought it would be interesting to recap on the history of this situation, and see what warning signs were known, and when. Therefore, I collated all my own posts on Globo here on Stockopedia over the last 3 years into one, easy-to-read 29-page document, which you can read in Google Docs here, should you wish.

What is striking, is how obvious (to me anyway) the warning signs were. Bear in mind also, that I'm not given to false negatives - i.e. historically when I've warned about dodgy accounts, I've been right in pretty much every case.

Another interesting aspect, is how there was an intense bear raid in Oct 2013, which ultimately came to nothing, and the company managed to continue for another 2 years before the fraud was finally exposed by QCM using evidence obtained from scrutinising Globo's supposed distributors, and interviewing former employees.

I think it's very important that private investors learn the lessons from this case. It's depressing to see how the same people on bulletin boards seem to turn up at all the dodgy companies, stridently shouting down any criticism of a company, and then losing their shirts when it all goes wrong.

At some point, when time permits, I'm going to create a new scoring system to identify companies which are highly likely to be frauds or semi-frauds - i.e. to formalise what I already do in my head to spot these situations early.

Utilitywise (LON:UTW)

Share price: 180.5p
No. shares: 76.6m
Market cap: £138.3m

(at the time of…

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