Disclosure: The author has a short position in one or more of the shares mentioned. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Globo PLC What’s with the Junk Bond Issue? Something’s Wrong Here.

By Lucian Miers

28 July 2015 06:40

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You have eighty grand in the bank yielding less than one percent. You don’t really need the cash anytime soon but even so you go out and borrow forty grand at around 4% When that loan falls due you go out looking to borrow more money at 10% to pay it back and have some more for a rainy day.

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Comments

nigel somerville

28 July 2015, 07:29

I seem to remember also that Globo said its cash pile was somewhere other than Greece, so we can all sleep safely. Can’t we?
Steveb3

28 July 2015, 13:25

‘A US hedge fund manager wrote a piece recently which pointed out, among other things, the almost hysterically upbeat nature of the company’s statements. The phrase “exceeding market expectations”, ‘

This is wholly incorrect – the piece was in fact written by Kamil Dimmich of North of South Capital – a very small UK hedge fund who surprise, surprise like Ennismore is short Globo.

If I was the CEO of a company, hell bent on doing whatever I had to to make a pile of money including issuing innacurate, false or misleading accounts, sales figures and updates, the one thing I wouldn’t do is relocate myself, wife and young twin children, to the USA. And I certainly would not issue ADR’s either, unless I fancied breaking rocks in the hot sun for a good many years.
stevie

28 July 2015, 15:41

quite right SteveB3. You dont risk Security fraud in the USA. Also to give a counterview, as this company is under short attack I imagine it is conserving all the cash it can. if it starts running low on cash the attack will intensify. better pay over the odds but keep very liquid. that said …there are question marks on globo’s accounts. but Lucien…lets be more balanced…please…