Shares of Avanti Communications (AVN) have had a rather difficult history over the recent past something which is said on both a technical and fundamental basis.
Both Avanti Communications (AVN) and Tungsten Corporation (TUNG) had trading updates last week. The knee jerk response to both was to mark the shares higher before slamming into reverse, in the case of Tungsten within minutes and with brutal consequences, whereas Avanti has experienced a gentle drift to just below the pre update level of 230p.
From the FCA's spreadsheet of short positions required to be disclosed to it, the following details changes to net short positions in the last week (red if short increased, green if reduced)...
Last week, Avanti Communications (AVN), the cash guzzling satellite operator accompanied its interim statement with news that it had raised $91.5 million in a placing, This was an equity cushion demanded by bondholders before they stumped up more money to fund the Hylas 4 satellite so the coast is now clear for another $115 million debt to be added to the $520 million it already has, giving the company an annual interest bill of $60 million plus. Not bad for a company that has an operating cash outflow.
Both Lucian Miers and myself are pretty bearish on Avanti Communications (AVN) on fundamentals as explained HERE by me and HERE by the Bard of the Boleyn. I’m pretty sure that after results on the 5th February, analysts will again reach for their red pens as forecasts are once again missed or fudged. The company is drowning in debt. But reports in that must read publication Spacenews.com suggest there is perhaps a major "problemo" with Hylas 3 and an RNS is needed NOW.
Lucian Miers had Avanti (AVN) down as one of his two top shorts for 2015 and so far it is looking a cracking short. Results are looming on February 5th.
A previous table showed a combination of AIM stocks covered bearishly on this website and disclosable to the FCA short positions had delivered outsized returns. The following updates, with links to initial pieces and a recent view of each stock (for the latter, click the 'end 2014 share price')...
Shares in Avanti (AVN) have managed to head higher in recent months thanks to a rumour that Facebook was about to bid. Now Facebook might just co-operate with Avanti to bring the internet to Bongo Bongo land but that will not earn Avanti a fortune and there is no way that a bid is on the way. So I am very happily short on fundamentals.
In a private note sent to clients yesterday but not published one of London’s sharper brokers asked the question, in share price terms is Avanti Communications (AVN) the new Quindell (QPP)? He writes:
One of the big market mysteries of the last couple of months has now been solved. Why has the price of Avanti Communications (AVN) being going steadily upwards despite results that appear to confirm the worst fears of the bears? Why has the astute hedge fund Ennismore been reducing its short position? Why has Avanti uber bear Mathew Earl – The Dark Destroyer - gone strangely silent as the share price has ticked relentlessly North?
From the FCA's spreadsheet of short positions required to be disclosed to it, the following details changes to net short positions in the last week (red if short increased, green if reduced)...
From the FCA's spreadsheet of short positions required to be disclosed to it, the following details the 20 highest net short positions and the changes (red if short increased, green if reduced) since a previous analysis HERE.
Avanti Communications (AVN) 2014 accounts were released yesterday and while the group's year end statement (from September 15th 2014) revealed that debt continues to pile up at an alarming rate (the debt rises), the accounts show that the quality of its revenues remains questionable as ever.
From the FCA's spreadsheet of short positions required to be disclosed to it, the following details changes to net short positions in the last week (green if short reduced, red if increased)...
I finally got round to reading Avanti's year end results to 30th June 2014 (released on 15th September 2014). And then I shorted some more stock.
Avanti Communications (AVN) served up full year numbers today and it all looks great. Uber-bombast CEO David Williams, who admits to misleading investors in the past, has put a great spin on what is actually a dog’s dinner. Take the four bullet points financial highlights. Three of them are a half truth, misleading or an outright lie respectively. And there are good reasons not to believe the fourth at all!
