Icebergshares: Battle for Planet NWOG.

The market doesn’t do anything out of whim or whimsy. So why did various people take a position in NEW? Why does there seem to be a battle for a company with no assets…? Why is the current SP .26?

So many questions, so few answers…

A few points NEW is cash rich, they have:

1. £400k in the bank.
2. £1m left to be paid  from the Niel deal.
3. £800k owed to them by director loans.

Total £2.2m without a placing..current MCAP without a placing £1.83m, the market stabilised at this level, not through chance, but it’s a simple cash in the bank value.

Given the OO go ahead, we could easily add £1.5m to this.

We’ve also got the Danish CPR due next month, this is expected to put a risk adjusted value of £2m on the resource and is the blocker preventing successful farm in.

The AIM listing for a cash rich shell company should add a further £500k-£1m to the Mcap.

Given all this anybody buying into NEW its lower price is set to make a handy sum of money.

I do wonder whether this was the plan all along, get the SP to its low of the low figure, issue hundreds of millions of shares or warrants to the BOD, see a dramatic rise in the SP, thanks to the valuable CPR, farm in and added highly lucrative new project.

The only problem is that several other people saw this as well, notably Chris and BMD and MTR.  Buying of stock took place. Suddenly it dawned on folks that a short squeeze was on. The price rose to .8p which was the trigger for selling as this was no doubt the exit strategy for a few folks given the above calculations.

Lets make it very very clear that even at the current value the company is still undervalued and could still see a multi-bag even without any short squeeze, don’t believe folks that tell you otherwise.

The company will resume trading very quickly, there is no doubt as to whether or not NEW is a “going concern”.

#NEW New World Oil and Gas – Don’t worry be happy…

#NEW – Don’t worry be happy…

There are lots of rather silly bits of speculation about motives, conspiracy theories etc on the BB’s. I would urge investors to concentrate on the facts and what might realistically happen.

• Private Investors won a fantastic victory with a NO vote for the cheap BOD shares and a NO vote for the placement shares.
• Cornhill has not been given 2.5bn shares it can happily give to its clients or to those that thought they had participated in the placement.
• The BOD know that a majority of shareholders are very unhappy with them, that those shareholders are now a sizeable cohesive block.
• The shares are suspended until the market can function correctly and shares can settle.

 

With 2 billion shares needed in the market, (we know this number as most brokers only have between 10-40% of shares settled), we know that the market can absorb 2bn shares without it effecting anything at the moment.

The only place these extra shares could have come from, are from short positions taken out by folks who thought they have guaranteed shares, but instead have simply taken out naked shorts to the tune of 3 times of the current share base.

If every share currently in circulation was brought by Cornhill and the other brokers it would still leave a shortfall of 1.3bn shares. This would obviously require a very high price to be paid.

The LSE are saying then that the shares will be suspended until and unless they get a guarantee of at least 1.3bn shares entering the market.

The only way the new shares can enter the market is either through a placing (which would need a vote) or an open offer.

No investors like to see their ability to buy or sell taken away from them, but we need to look at the bigger picture. For current investors we have a few things to think about.

How many shares will be issued?

Who will the shares be issued to?

At what price will the shares be issued?

With regards to how many shares, the fewer shares issued the better, however even if 2.8bn shares are issued, the answer to the other two questions will determine how good or bad this is to investors.

The shares will be/must legally be, offered to current shareholders first. Only after this will the leftovers go to Cornhill, or whoever NEW use to underwrite the offer. Current shareholders will snap up most of the shares if the price is .05p leaving maybe .5 to 1bn shares for Cornhill. If we increase the price to say 1p and decrease the number of shares to 1.5bn then it might well leave 800m to 1bn shares for Cornhill but at a much higher price.

This is just my own calculation but I can see around 2bn shares being held by investors who are trying to force the short squeeze. Brokers need 1.3bn shares to settle these trades already made. Flippers and shorters who have found themselves in a naked position need a further 1.5bn shares as a minimum. Given all of this, current holders of stock, and those that take part in an open offer will find their shares very much in demand when the trading resumes.

What price they get on the open market, will depend on how quickly brokers and shorters want to settle accounts and what the current holders decide to sell out at. I am pretty sure it’s far higher than the current price though.

For these reasons I am very happy with how things currently stand.

Ignore a lot of the uncertainty around the share, BMD and Chris might make an offer, BMD is certainly very good at pumping stocks up(although I am not really interested in being in that kind of stock).

Something might or should happen to Cornhill.

An EGM might or might not be called to vote out the current BOD.

But as an investor all we really care about is the bottom line and for me that’s looking healthy when it moves out of suspension. I am genuinely happy, not worried.

#NEW the way out of wonderland.

#NEW the way out of wonderland.

The more it goes on, the more I am reminded of Alice in Wonderland. Mysterious smoking Caterpillars, Cheshire cats and Mad Hatters. I will leave folks to figure out who might be who in this scenario and who is the Queen of Hearts…

Anyway so following on from Ben’s excellent feedback from the EGM. We have an independent count in place for the votes. This is mind-blowingly good news, the BOD have also had to confirm that the register is in such a mess that it can’t even count the votes accurately.

A lot of side line investors kept repeating the mantra, that EGM’s will rubber stamp it, the BOD will get their way they always do….This is true nearly of the time, but is blatantly not true this time, with this EGM.

Going forward we need to find a way out of this wonderland. The FCA/LSE does not like to deal with things “in the open”, instead a way forward will be found which satisfies all parties to a degree and one that keeps everything working. It won’t really care what happens as long as everything is seen to be “working”.

A number of behind the scenes, happenings have occurred. We have a stock that has now been suspended. We have a broker who has supported and organised the placement and the 2bn none existent shares, who has a web site that has been down for “maintenance” for days now. Whether you believe this, in a world of 24hr hosting support, for a small and simple website is up to you.

The only thing we need for a full house is some kind of sanction against the nomad, or for their website to “go down for maintenance”.

The FCA/LSE will no doubt have contacted the nomad of #NEW to discuss the situation of a failed and very public EGM. Having a company suspended simple because it can’t hold an EGM vote is not good publicity for the AIM exchange and I can’t see it happening for long.

So the FCA, LSE, Broker, BOD, Shareholders and Nomad all need a way out of wonderland. For me the majority of the impact will fall on the broker as they must have ultimate responsibility for the placing if it fails.

An open offer will not meet any of the above criteria, it will be challenged left, right and centre due to the mess of the registry. It will take too long. It will not give enough shares to the broker to meet its obligations. It is not in the best interest of the company given the current offer price.

A new placement of shares at the maximum price of the last 10-20 days, would get a passed vote by the current shareholders imho(this is needed for legal and “clean” reasons). It would put the shares in the hands of the broker and enable the various counterparties, funds etc to settle, it would allow the flip floppers to buy the shares they needed from the placing, solving that problem. The share registry would be healthy again and the company would have a large injection of cash to move forward.

The above of course would mean the broker losing out or passing that loss on to the funds or its clients. It would also mean the flip floppers potentially having to take a hit. The FCA and LSE could claim that the markets have worked themselves out, without creating a new precedent.

Anyway just a thought and lots more to happen on this share, I have no doubt. Keep a firm strategy in your mind, at the moment I am happy to hold.

#NEW update 15/05/2015

A few points about T20’s etc and how the flippers expected the placing shares to fill their short positions.

We have the EGM at 1pm on the 19^th(Tuesday), the shares should be tradable i.e settled in peoples account according to the RNS by 8am Wednesday morning.

For a start I can’t see how this would possibly happen as once approval has been given it normally takes 48 hrs for the shares to be admitted to LSE trading, but let’s ignore that. I rather think the BOD thought they could give the go-ahead to the stock exchange prior to a rubber stamping EGM. (This was a very bad thought).

So the flippers will be assuming they can close their positions (and indeed have likely arranged to have their positions covered and closed by Wed or possibly Thursday.

The T20 time is not FRIDAY (today).

However there is a big caveat in the above. The placing shares are now very unlikely to go into the accounts on Wednesday, a “No” vote is almost certain. This means the flippers have a big problem. They have an even bigger problem in that the shares are taking 5 days+ to settle atm. All of this indicates that if they want to meet their T20 obligations they need to start settling now, if they don’t every day adds to the risk. If they wait until Wed/Thur and the SP spikes on a “no” vote news then they really are buggered.

The rise start a couple of days ago imho, with the flippers starting to try and buy the stock they need. It certainly hasn’t finished.

2 Billion short fall in shares.

Now onto the important bit, the short squeeze isn’t just happening because of the flippers, its moved beyond that. Prior to the dilution announcement NEW was heavily shorted by individuals who thought that a placing was going to be needed. These shares need to be covered.

To meet demand the Market Makers will also be heavily short of shares.

To meet clients expectations of settled shares, many, many brokers will also be heavily short of shares.

All of this is an almighty mess, but one fact is inescapable everyone needs shares, if you have settled shares in your account, then your hoarding a very in demand product, keep hold of it.

The open offer and everything else is largely irrelevant. That will be news for latter following week. I do expect though an announcement that an EGM has been called to kick out these cretins, that will likely be Monday and heavily announced over the weekend.

It is not a share to sell out, in fear of bad news over the weekend as simply I can’t see any bad news that might break, but can see plenty of good news that might surface over this time.

#New world silly buggers…..

So NEW has issued the RNS that they dreaded, The Williams now hold over 30% of the company and its settled in the crest account.




RNS “On 8 May 2015, the Company received a communication from Jon Rhodri Williams, Christopher Williams and Judith Mary Williams (the "Parties") purporting to be a letter of requisition, and claiming an aggregate holding of 342,328,669 ordinary shares in the Company.…the Company is treating the Parties' requisition as invalid as the Parties have failed to satisfy the criteria of either article 89”



And then we have…todays holding RNS which states that the Williams really did have 342m shares and now had 250m…..



This seems strange either they had the shares as a holding before or they didn’t. My understanding is that they didn’t have them settled and that the 250m are settled now and the rest will settle by end of play today….RNS tomorrow then. No shares have been sold by the Williams its purely a very disingenuous and misleading, not to mention false way of reporting by the company. We don’t really expect much more from them though.



The NEW BOD knows this means an end to their existence, the only question is when and whether they go out with an ounce of grace and decency.

The blocking vote at the meeting means that the placement will NOT now happen, it really is inconceivable that the BOD will get 300m yes votes…
An EGM can now be called under Jersey Law in June to have a vote of no confidence in the BOD and to sack the lot of them…


The question is really around what happens now.

Well we have two scenario’s.



Scenario 1 is that the BOD follow through with their open offer, given that Chris would have to be stupid not to take shares at 0.05p he will certainly take up his allocation IMHO. Many of the other holders will also take their allocation leaving, if they are lucky 800m to 1bn shares for Cornhill. Will this be enough to cover all the forward sold shares from the now not to happen placing? I doubt it.




Scenario 2 is that the BOD don’t attempt the open offer, they submit to the overwhelming view of shareholders and raise the funds at a much higher price with far less dilution.  Major share squeeze occurs and the SP rises well above 1p.

There isn’t really much else that can happen, yes we might have an offer the company, yes due to a vastly incorrect share register the court might decide that no vote can be taken immediately.




However, under no circumstances, can those that forward sold their shares, close all of their shorts on time.




The rise will happen...Thanks flip floppers...

Icebergshares Quick round up on Election Day

Firstly I’ve not brought or sold any positions for a while, so If I am quiet about a share, it simply means I am busy, or there isn’t much to be said.

The UK election.

People need to pay attention to this, it will effect some shares imho. It looks like nobody will win and even a Labour-SNP or CON-LIB alliance will fall short of votes to get a majority.

This is likely to mean uncertainty, which the markets don’t like and deals which could well effect UK exploration, house building or whatever sectors your in….

Let’s start with the ultra-busy #NEW.

Its getting down to a value where even if there isn’t a short squeeze, with the money coming in NEW could be profitable cash handy shell company. Allowing for a dilution the MCAP isn’t unattractive with limited downside. This could help to derisk the upside.

A hefty warning though that a delisting for the company is possible so definitely one to only invest what you are happy to throw away.

#SAV drill results.

Although a little disappointing, I fully stand by my post on LSE.

“Blimey what a lot of info. I do wish David would spread it out a little bit.
Get the bad stuff out the way.
Zone 5 looks cr*p. I am glad they canned the drilling.
Zone 4 Diamond drilling wasn't great either, they missed the target. Yes there found evidence of VMS mineralisation, but they still need to find the actual mineralisation and that could take a fair bit of time and effort.

The western targets in Zone 4 look good from initial testing, they actually look great re gold target, although weak for copper. For me this looks to be a nice concentration of gold veins, separate to or leading to or from, the main VMS.

The market though does not value rock chip samples(those silly enough to have invested in ORE will know this). They can be very selectively taken and represented.

David needs to hit with the next ground of drilling to prevent SAV from being in danger, the trenching work, if done in enough bulk, might well be an advance to go, collect £200, if its good and it should be really.

Market won't move until we get that trenching work or economic movement on Mozambique imho, I just hope that David raises money post this work in August or September.

If I had to grade the RNS's today it would be a C.”

The gold does look promising but we need it to be AIM proof to allow the SP to recover and expand.

Overall still a nice hold, but I think I need to check with David to see if he can expand on the RNS a little.

#OXS still waiting, we still have definite silence from all involved and concerned.

We also have the usual overhyped and overpriced companies (won’t name them), but I hope folks are careful out there. Don’t get greedy, pick the safe bits and if in doubt don’t hit the button!

Aim higher......

Hope people have enjoyed the bank holiday, lots of #NEW tweets, hope it works out for folks, but also hope folks understand the longer term consequences.

I posted a blog back in March http://icebergshares.blogspot.co.uk/2015_03_01_archive.html

It was a not so veiled viewpoint of something that investors don’t think about too much.

I’ve also tweeted about the frothiness of the market at the moment. The main point I was making about this frothiness, was that the market is not behaving correctly, we are seeing very large rises and falls without too much substance. Yes this always happens on AIM but not..Repeat NOT to this extent.

For me this rings alarms bells. Rome fell due to the decadent nature of their system.

AIM is decadent.

There is far too much of a cozy relationship between nomads, companies and brokers. This impacts the market doubly through a very cozy relationship, between nomads, companies, brokers and powerful private investors and investor groups.

Add on a layer of corruption, from all of the above and we get nomads having to apologise for the rampings of CEO’s, forward selling of placements and market manipulation, to allow risk free high margin placements, the shafting of shareholders al la Afren.

Given all this, what’s happening at #NEW has been on the cards for ages.

I have no doubt that over the next few months we will see more of this, along with suspensions, CEO resignations, court action and warnings from companies.

Make no mistake fortunes will be won and lost. But most investors (notice I say most and not all), will be playing a game of Russian roulette.

As a private investor you need to make a decision, play the game, take the risks and gain the rewards. Don’t play the game and perform a level of due diligence on any investments.

So what can investors do?

Find out who the nomad, broker and advisers are.

Is the company “friendly” towards certain private investors? (this is a bad thing).

Does the company act professionally at all times?

Are leaks common?

Does the company survive on hype?

Personally, I’ve been steering clear of dodgy companies, despite favourable sentiment, for a few months now. For those wondering the boring, high growth, professional companies such as #AEG are the ones I am hinting at as good companies to invest in!

Hope whatever peeps decide works out for them.