Geong Share Discussion Threads

[bbluesky] 12/10/2013 20:49

Well, China Information Technology, on NASDAQ, similar business,"an application software developer", is back close to issue price and looking good for new highs, profit - (minus) $89m, 31/12/12. GNG case of right place and previously wrong time?

[sir rational] 12/10/2013 20:22

And all for 100p a share lol

[bbluesky] 12/10/2013 20:19

If I was a Western social media dealer/provider and cash rich looking for new avenues (which is de rigeur) so continued international expansion, GNG would be a partner/take over choice: more Westerncentic than most, IBM, Oracle, well connected in PRC, dirt cheap, China (big market)!!! and who knows, old revenues coming in as a bonus...Connected (never lost a client and see client list!), incredibly cheap... I put to the board, find me a better alternative..Ladies and gentlemen,opportunity knocks...

[simon templar qc] 12/10/2013 20:08

No I wont. Have no intention spoiling the party I may be wrong in my assumptions.

[sir rational] 12/10/2013 19:56

Well: stay sceptical (that's good) - but don't go sour on us for missing out on the rise.

[simon templar qc] 12/10/2013 19:09

Who knows but as important as cash is also the profitability of the company and on that score that would be my biggest concern. This is what the company said in their Final statement:

Current Trading:

"Since the year-end the Company has continued to pursue its stategy of
focussing on SaaS business and on declining IaaS business which is either low
margin or subject to a long cash collection period in order to increase the
overall gross margins and to reduce the level of accrued income. This strategy
has meant that turnover and profits for the first two months of the 2014
financial year have been below the 2013 level and this is likely to continue
into the year.

Collection of cash in the first quarter was GBP 2.2m in accordance with the
Group's forecasts."

Last year the company made a measly profit at interim period and full year loss after finance costs were taken into account.

So what are the interims going to look like?

I think you can expect a loss.

The only thing investors are chasing in my view is the trade receivables! A risky strategy in my view.

So this is my conclusion; if there is no suggestion of a takeover in the offing and by far better cash collection, anyone chasing the share price up at the moment may have a shock later on.

[chrisis33] 12/10/2013 18:52

Given the recent AGM statement, and the current 3.64m GBP cap, presumably they would simply repeat this bit ...

"The Company had net cash (i.e after taking account of the GBP1.0 m of convertible unsecured loan stock) of GBP2.9m as at 31 August 2013."

[simon templar qc] 12/10/2013 18:48

This is an example of a directors duties/best practice, when they see a rapid share price movement...

22 Novemeber 2011

Zoltav Resources Inc

("Zoltav" or the "Company")

Share Price Movement



The Board of Zoltav notes the recent movement in the Company's share price and confirms that it knows of no specific reason for this movement. The Company continues to review a number of possible investment opportunities and will make further announcements as appropriate.

....

If it was a takeover the company would have a duty to inform the market. The directors have a duty to inform the market when they see a sudden and sharp share price movement whether it be on the upside or downside like what happened at Bushveld Minerals the other day. The company came out with a statement after a sudden and rapid fall after a number of days.

[simon templar qc] 12/10/2013 16:10

davidosh,

I simply wrote to the company setting out their duties and at this stage they have told me they will respond soon. You lot could have done the same. There isn't really much to add but reminding them of their duties may jolt some kind of action.

"Thank you for your mail of 11 October 2013 which has been forwarded to the responsible director of our company.

We will come back to you soonest possible.

Thanks.



Best regards,

[stewjames] 12/10/2013 15:33

So no partial conversions allowed?

[davidosh] 12/10/2013 15:27

StewJames....to short there needs to be stock to borrow and even in some £100m market cap companies that can be difficult so I doubt they would have a hope for the size of borrow they would need lol. That said they could probably make the share price move significantly just by buying and selling in any size here as the genuine free float is not that great. I seem to remember that employees hold quite a few shares too.

[stewjames] 12/10/2013 15:21

Do Hanafin have to convert in full?
Anything stopping them selling short then converting?

[davidosh] 12/10/2013 14:18

Why not print the response if you have had one ? It cannot be price sensitive or they would have to have advised all shareholders by RNS.

[simon templar qc] 12/10/2013 10:35

If it helps you guys its possible the company understands their duty in respect of advising the market of the share price rise of late. The reason I am saying that is as I have reminded them and received a response.

Now don't take this the wrong way there is no guarantee the company will issue a statement but they really have a duty to do so.

[davidosh] 11/10/2013 23:57

No progress so far and I have not heard from anyone or seen comment here to suggest there was an Agm conference call. However I really do think such a call with the directors if it was available should have been much better communicated. The interims are not far away so maybe we can set something up for then.

[augustusgloop] 11/10/2013 20:45

Sir Rat,

with the share price at 10p, if the lender believes that GNG is genuine - then surely he will convert!

If they don't then there is only one conclusion that you can draw.

[janeann] 11/10/2013 20:06

post 21150; Davidosh was requesting a conference call with the company; he has been notably quiet since but such a call would be valuable to assist understanding of what is going on, and why there has been no comment from the company.

any progress davidosh?

[sir rational] 11/10/2013 18:58

Perhaps the lender sees no value in the loan, so converts and sells to the death in order to at least get something back out of a nothing situation.

We can all invent stuff but it's better to post logical, researched stuff rather than stuff & nonsense.

[augustusgloop] 11/10/2013 18:55

eacn,

or perhaps the management would love the CULS to be converted - because they need the cash.

Pushing the share price up encourages the conversion - so perhaps that is their intent.

[sir rational] 11/10/2013 18:44

Thanks, Eacn.

[eacn] 11/10/2013 18:37

Any possibility of conversion of the CULS should depress the share price, since conversion is at 5p and gives Hanafin 36.4% of the enlarged issued equity.

The company has the option to redeem the CULS, which would clear the dilutive overhang and provide a fillip to share price However, if speculators have bought into the stock believing redemption is on the cards, then they may cause the exact opposite to happen; namely conversion of the CULS.

I say this because Hanafin can make a nice turn on conversion if they can convert and sell their resulting holding at an average share price of say 6p (a 20% return, which compares favourably with the 7.5% coupon attached to the CULS).

Now, whether in practice that would work without a fundamental change in the company's fortunes is a moot point: conversion for the CULS will need to be the subject of an RNS and the LSE will have to admit the additional stock before it can be sold, so the offloading of any converted stake cannot be done without the market being informed.

Of course a share buy back would run into similar problems: why would GNG want to buy back shares so as to elevate the share price above the CULS conversion level? It is asking for dilution, which will dilute the management's stake (unless of course they happen to be behind Hanafin).

The board sought and obtained an authority for a buy back at the AGM. It would not be logical to use that authority unless you had agreed with Hanafin that they would not exercise the CULS or you had agreed to redeem the CULS. If either of those later statements were true then the dilutive overhang has effectively been cleared and you might expect the share price to rise as those in the know bought into the stock. It may therefore be that a share buy back has yet to proceed but that the conditions necessary for it to proceed have been agreed and this is the source of the speculative interest.

The alternative is, as other posters have suggested, that the company is the subject of an approach or the management are preparing a buyout. However, in either case I would have expected an RNS.

[stewjames] 11/10/2013 18:14

If the loan stock were converted, would an announcement have to precede any trading?

[sir rational] 11/10/2013 17:39

Nothing would surprise me: say we get an announcement on Monday that mysterious Mr X has got a 10% stake. Which he adds to over the next few weeks. Then mgt offer something derisory to take our shares off our hands, with Mr X willingly adding his 15-20% to mgt's 26%. Probably that boy running the Canada office lol.

[jtcod] 11/10/2013 17:29

What if the management themselves were behind a buy-out for instance. Sellers have been giving up their shares all week whilst the stock exchange has sat on it's hands. I think they could feel justifiably let down by such a run of events. Of course that may not be the case but the management should at least be made to comment even if it is that they know of no event that should cause such volume and price action.

[jtcod] 11/10/2013 17:21

I find it hard to understand how the stock exchange has allowed the management to stay silent in the face of approx. 32% of share issue traded and a 234% rise in share price over just 13 trading days.

10.5% of the share issue was traded today alone!