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.

Sell Globo: It Makes Avanti look blue chip

By Lucian Miers

25 October 2013 09:03

A wonderful spat has been developing on various bulletin boards in the last few days between bulls and bears of Globo (GBO) the fast growing telecommunications software group which is capitalised at £234 million and tapped the market last week for £25 million at 71p per share. I have gone short.

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Comments

Paul Scott

25 October 2013, 09:34

Hi Lucian,

Thank you for the kind mention. Although just one quick correction. I haven’t shorted any shares for years, but in the last week I decided to open small shorts on large caps Ocado & ASOS. I’ve no intention of opening any shorts on anything else, as it’s not my area of specialism & it’s too risky for my liking to short anything smaller than a few billion market cap.

I’ve never shorted Globo, and don’t intend to.

What people struggle with on BBs sometimes, is that I actually speak as I find, and not to just prop up my own market positions (as they do!). This seems a novel concept to them!

I agree that Globo looks very dubious though, in particular the lack of cashflow, and many stray debits” on the Bal Sheet, that probably should have been expensed through the P&L. Red Flags abound. It might turn out to be fine, but it’s not a risk I would take unless & until they get Debtor Days down to below 90 at least, and preferably down to about 60. Anything over that is a massive red flag.

Regards, Paul.
Tom Winnifrith

25 October 2013, 09:51

It is the bonkers one here – piece now published to make that clear.

t