The sell in May challenge

Shaolin_Monkey

These extreme price swings on distressed shares can be the result of a "short squeeze". Probably short sellers rushing for the exit following the news about the company securing new long term lending facilities. If they hadn't arranged new borrowing then it would probably have been forced into administration very soon, but this will likely keep them going a bit longer. The shares are pretty illiquid so a group of short sellers chasing the few available shares in the market can easily push the price up rapidly.

sabretoothtigger

FTSE is the cheapest stockmarket outside Asia apparently
12 PE

Surprising and it does rely on them returning expected results but they keep saying now we and USA have growth. I guess its a decent hold then

http://www.telegraph.co.uk/finance/personalfinance/investing/10219481/The-UK-is-the-cheapest-main-stock-market-outside-Asia.html

gadgetmind

In real life, I'd probably be closing my short on the Co-op prefs right now and perhaps even going slightly long on them.

I think that the Co-op as equity holders need to understand that they are in a total loss situation and get to the back of the queue behind the more senior debt. There are powerful forces at work behind the scenes and I see an asymmetrical risk/reward ratio to the upside.

Old_Slaphead

gadgetmind wrote: »

I see an asymmetrical risk/reward ratio to the upside.

Genuine Q - What does that mean ?

gadgetmind

Old_Slaphead wrote: »

Genuine Q - What does that mean ?

It probably suffers from several levels of tautology but what I meant was that while there is still a risk of total loss, I think this unlikely given the "widows and orphans" line being taken by the activists. It's more likely that we'll see the prefs retaining some level of coupon even if this means that some turn into a different bond and others into ordinaries.

The co-op are trying to haircut the bond/pref holders and still retain majority ownership, albeit after a capital injection. A better solution for bondholders is for the holders of the ordinaries to sod off and for said senior holders to squabble among themselves regards who comes out with what.

sabretoothtigger

Old_Slaphead wrote: »

Genuine Q - What does that mean ?

risk outweighs the reward. If this was a weighing scales, they'd be a heavy clunk shortly after proceeding
price is not right

Not that I know the details, I thought pibs was inferior to all pretty much. If co-op are funding the bail out then tough ?

The Basel III rules are expected to phase out PIBS' inclusion in Tier 1 regulatory capital, meaning that building societies will be looking to replace PIBS as the opportunity arises.

pencilled in for extinction then:eek:


I bought BP recently while thinking this is probably going down further, cant short a stock like that though imo. Not sure anything else is primed for a mid challenge short scalp

gadgetmind

sabretoothtigger wrote: »

Not that I know the details, I thought pibs was inferior to all pretty much.

But not to ordinary shares, which is what the co-op hold. The co-op group are trying to use bluster to get their way but scalping pensioners who are also often long-term co-op members isn't great PR.

So saying, I haven't (yet!) put any real life money into these prefs or pibs.

sabretoothtigger

I guess co-op is not going to secure the debt and use that position to outrank the pibs then. I just would presume whoever is bringing in the money to fix it, is the decider of events.
Nice to hear pibs have some leverage left then

Reaper wrote: »

With little prospect of raising further funds from the market I think many may go bust. Amara Mining got money from Samsung so at least their finances are not as bad as some. I wish you luck but contrarian as I am it is step too far for me to dive back in, for now at least.

They doubled since then, up 15% today. I think they could have recovered anyway but the gold price has been surprisingly bouyant just as Fed threatens to act tough, of course that is bs but strange market timing as usual. The graph is strong and still looks it, I'll put in an order and expect to sell some AMA tomorrow.

Its a long road but I think it could triple eventually, it is funding like you say and then results or profit perceptions

Thrugelmir

Co-op bank looks like insider trading to me. :cool:

gadgetmind

Thrugelmir wrote: »

Co-op bank looks like insider trading to me. :cool:

Anyone shorting them from before the mysterious blackhole was found would be doing *very* well.