I did post this on ADVFN, but a vile lunatic seems intent on following me around and trying to trash the thread. Sadly, these days it's not unusual for the ADVFN site. I would simply ban this madman from the thread if I paid for their services, but since I haven't and have no intention of doing so, I can neither moderate or ban him and have therefore opted to post below.
Those of you who have read my previous two blogs will no doubt see the link with the following:-
In July, OptiBiotix issued a RNS stating a change in strategy. The CEO said the following:-
"I believe that OptiBiotix's diversity of both IP and Commercial relationships offers shareholders multiple opportunities where future value to shareholders may be best realised by spinning out domain specific opportunities where we as a Board believe the individual parts may be properly resourced and valued."
Now it's not difficult to compare that statement with yesterday's clear change in tone:-
"As these divisions grow in substance and start making a significant contribution to group earnings we will consider forming new legal entities with the potential for a separate public listing."
So the first RNS hints at spinning out the divisions and then raising extra cash to fund each entity.
Yesterday's statement clearly indicates that they have received no support for this idea, and can only consider it IF the individual parts can eventually make a profit in their own right.
Note:- "significant contribution to group earnings" before considering a spin-off. Since the group is barely producing any revenues, let alone earnings, then one can assume that the spin-off idea is a considerable time away.
You don't need to be Einstein to work it out. It's in black and white in the company's own words.
Why then (from the main thread) does Billy Liar say the following:-
"So all in all it is very good, but not absolutely brilliant. Not enough to drive an immediate one day re-rate. What is needed for that:
1. A demerger. We were hoping for hard news on that today. We now expect it in either this coming SEPTEMBER or early OCTOBER. That could drive a MAJOR RE-RATE."
So despite the company stating quite clearly in yesterday's report that each division would need to turn a profit first, Pinnochio thinks that news of a de-merger could happen as early as next week? Is he referrring to the same company that reported revenues of just £88,000 and a whopping loss yesterday?
He also says:-
"Cash will be boosted in H2 by a) more sales and b) the exercise of the last warrants from before the RTO that created Optibitix which must all be exercised by January 17 2017. But there is clearly " NO " funding concern, at all."
Who's he trying to kid? Bloody hell, the company had a cash outflow of £900,000 in H1 from operations. Administrative expenses are up considerably (£300,000). The small contribution that they get from revenues will be totally negated by increasing expenditure and I'd estimate full year cash consumption from operations will be around £2m. Further funding is almost inevitable at some point if they intend to exploit their "opportunity". About 12/18 months I'd guess.
Finally, just to clarify. I've nothing against OptiBiotix. I'm not short of the stock. The share price could go up or down in the next few months. I just happen to think it's a "jam tomorrow" stock that is currently overvalued.
My key point is that I can't stand the duplicitous fraudsters that often talk these companies up for their own gain. See:-
http://michae1mouse.blogspot.co.uk/2016/08/free-shares-guv-thatll-do-nicely.html
They'll quite happily talk shares up or down to line their own pockets by any means possible.
They need exposing.
I've done my bit, and I'll leave it there for a while.
I don't normally issue advice on this blog, I'll make an exception this time.
Don't sign up to share tipping sites. If you can't make share purchase decisions yourself using your own research then buy a tracker fund. It's safer, and you won't be throwing money to these duplicitious shysters.
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