Shares in Globo (GBO) are 5% ahead on the back of what appears a bullish trading update. But hang on am I missing something here?
Shares in Globo plc (GBO) currently trade higher, at more than 50p, today on the back of an update reporting “a strong financial performance in the first half of 2014, ahead of market expectations” and that “we remain confident about our future prospects”. However, what about decisive cash generation?
Last week the Dark Destroyer Matt Earl produced what he termed a “devastating” analysis of accounting at Globo (GBO) – you can see it HERE. A Bulletin Board poster has at the bottom of that article served up what he termed a “devastating” response to the DD. Now Matt hits back. It is all Greek to me (TW) but Matt writes:
It is no secret that I am not a fan of Globo (GBO) – perhaps I shall have to treck up from the Mani to Athens for another visit. I sense things are getting exciting. For the bears.
Since I last commented on the company in May, Globo plc (GBO) has updated on trading and then most recently announced an acquisition – this of the services division of Sourcebits Inc., a developer of mobile applications and proprietary products for enterprise customers. But Show Me The Money! I mean where's the cashflow?
Globo (GBO) this week issued a trading statement which is the usual gibberish from a company driven by issuing non news to support a share price which I fundamental terms is unjustifiable.
I have noted before, in relation to Globo (GBO ) as it happens (HERE) how companies that are starting to panic about a dismal share price or about investors are asking pesky awkward questions about profits to cash conversion and other investment fundamentals react by issuing total non-news. Today’s effort from Globo (GBO) is a stormer in that respect. It is prize winning non news with a dose of unintelligible corporate bullshit thrown in. In fact it is such classic MBA style bullshit that I will run a competition on the back of it.
There was I sitting in Real Man in Clerkenwell tapping away happily on my PC when I became conscious that there was a man outside staring at me. He seemed rather agitated and was mouthing words at me one of which began with F and rhymed with ducking and the other one rhymed with blunt. Whatever..
In an earlier piece on Globo plc (GBO) – see HERE – I concluded that significant further improvement in net cash generation looks to be needed to justify a market capitalisation which is currently comfortably in excess of £200 million (€243 million). I added that a balance sheet analysis supported this view – and the following details this.
In its results for the 2013 calendar year, Globo plc (GBO) notes earnings per share of €0.074, up from a prior year €0.056, and that also “current year trading has started strongly”. Shares in this Greece-originated mobile and telecom software and services business responded positively but, even at a current 57.125p (currently €0.695), ostensibly look to represent growth value. However, what does an analysis of the key cash flow (see below) and balance sheet numbers suggest?
Globo (GBO) has today served up calendar 2013 results that look as impressive as its luxurious new Athens offices that I visited and filmed yesterday. The numbers have wowed the City – the shares are up 14% at 53p. No doubt the analysts call this afternoon will be a love in with the management. But should any of the teenage scribblers actually want to ask a tough question or two here are 10 to get them started. Many thanks to Matt Earl, the dark destroyer, for this.
Globo (GBO) results out today look superficially good but read deeper into them and they beg far more questions than they answer. Just to give the City analysts a heads up on what questions to ask in the conference call later today I have now published a 10 BIG Questions “Red Flag” special HERE.
For the next two weeks I am on holiday in the remote Mani region of Greece, an area with a colourful history of blood feuds and murder. But on the 29th I drop the Mrs off at the Airport and head into Athens and the very next day we have results from Globo (GBO) whose headquarters are in the Greek capital. Oh what joy.
In days gone by if AIM Cesspit posterboy Globo (GBO) issued a release saying that a Non Exec Director had farted three times in a day, the Bulletin Board Morons would have lapped it up and the shares would have jumped 15%. Times have changed and ahead of the results investors are (rightly) shit scared.
The weekly financial video postcard from Tom Winnifrith is longer than usual and wide ranging. Tom is preparing for UK Investor Show on Saturday April 5 and discusses some of what excites him so much about next week, notably the shareholder activism session. You can still grab one of the last 50 seats going by clicking HERE. Also on the agenda:
5 Star rated (by me) blogging supremo Paul Scott posted a comment at the foot of my most recent humble offering on Globo (GBO) which is frankly far better than the piece itself. In it he explains why he has added to his short in Globo. I think this merits a wider audience and so republish the comment as an article.
Globo (GBO) has put out a statement saying that there is no reason for its shares to have tanked. The market is not impressed and the stock now trades at just 48p having lost almost one third of its value in two days. Worse may be to come.
Greek software firm Globo (GBO) has today announced that it fired its auditors six weeks ago and has a new firm in place. For a firm whose accounts have come under some scrutiny (see HERE) that might raise a few eyebrows but when you look at the exact timeline you will be truly kebabbed.
There must be many fans of Globo (GBO) who wish that everything could return to the simple days before the October collapse in the stock.
Globo (GBO) serves up a trading statement on Tuesday. My view is that whatever it says matters not a jot. I do not believe that this is an investment grade business. Where the shares go short term I know not. But one day they will collapse. When will that be, I know not. But I would never want to own shares in this AIM Cesspit posterboy. Fund manager Ennismore has a short position and this internal note is a devastating analysis of why it is right to be short.
