If only it was always that easy......

I couldn't let the past two days trading in Avanti Communications go without further mention.

Please see Thursday's blog post:-

http://michae1mouse.blogspot.co.uk/2016/08/dont-try-this-at-home.html

Following another stellar 44 % rise in Avanti's share price on Friday, the shares have nearly doubled in two days.

If only short term trading was always that easy.

For reasons that I explained in my previous blog, following the FT article it was pretty much a one way bet.

The only possible fly in the ointment could have been Avanti denying any bid rumours. That was very unlikely to happen since they are currently conducting a strategic review, and it was no surprise to see them issue a statement on Friday (pm) to note the share price rise and neither confirm or deny the rumours. Why would they? The rising value of the equity is very much to their advantage.

If there were more one way bets like this then I'd consider short term trading far more often. As it is, I've always found my current style more profitable in the long run i.e. Seeking out value in micro-caps, building a reasonable position and patiently waiting for the company to grow and prosper. It's also less stressful and allows me to get out and about without being stuck in front of a screen all day. Anyway each to their own.

What next for Avanti? I don't know. I hope that the company can find a satisfactory solution to its debt issues since they have achieved a considerable amount, albeit more slowly than anticipated. Let's not forget that in the recent trading statement they said the following:-

"Avanti (AIM: AVN) a leading provider of satellite data communications services in Europe, the Middle East and Africa confirms that revenue for the financial year ("FY") ended 30^th June 2016 is expected to be approximately $83m.  This represents growth in core revenues year-on-year (excluding the spectrum sale in the prior year) of over 35%.  EBITDA is expected to be approximately $8m.

Avanti's commercial reputation for high service quality and product innovation is strong, enabling it to win high value contracts with prestigious telecoms companies.  In particular, the Group is leading the market in winning cellular backhaul business, and many opportunities are opening up around the EMEA region.  Contract wins in the fourth quarter were over $70m showing commercial traction is building."

It's not a bad company, it just took on too much debt and wasn't growing quickly enough.

Shame on those going short on the stock and trying to precipitate Avanti's decline for their own selfish purposes by destroying the value of the equity over a sustained period of time.

Anyway, anyone who lost money going long on the stock was given a wonderful opportunity to recoup some or all of their losses with the price action this week, and I hope Avanti do manage to reach a satisfactory arrangement where they can survive and prosper in the longer term.

Well done if you've taken profits and good luck if you've decided to hold on for more.