Featuring Clontarf Energy (CLON), Edenville Energy (EDL), Gulf Keystone (GKP), Tavistock Investments (TAVI)
This morning’s announcement from Gulf Keystone (GKP) had the decided whiff of a profits’ warning about it. It is extremely frustrating when companies dress bad news up. I appreciate the importance shoring up sentiment has, but if a company has to warn shareholders that it is going to miss its financial targets it surely must be an inviolable principle of transparent markets that it explicitly says so. Today’s example from Gulf could prove to be a perfect case in point and doesn’t bode well for new CEO Jón Ferrier’s attitude towards investor relations.
Featuring Coal of Africa (CZA), Gulf Keystone (GKP), Kalimantan Gold (KLG), Red Emperor Resources (RMP)
If you want me to analyse a stock for you just drop me a line at sqmir@hotmail.com - Today I look at Globo, Gulf Keystone, Tristel
If you want me to analyse a stock for you just drop me a line at sqmir@hotmail.com - Today I look at Cyan, Gulf Keystone and Infrastrata.
Apologies for overlooking the truly dreadful smoke and mirrors 2014 results from Gulf Keystone (GKP) last week. In this podcast I look back and flag up a few points the bulls might have overlooked while out on day release from the asylum.
I received shedloads of abuse when I first suggested selling Gulf Keystone (GKP) several moons ago at 186p – the shares are now 36p but where are the apologies? The sell case has changed but is in fact stronger now – my initial target is 10p.
Gulf Keystone (GKP) has managed to raise $40 million before expenses (let’s call that $38 million via a heavily discounted placing at 32p. This is a can kick. It is applying a sticky plaster when your arm just fell off. Bond holders will be laughing, for shareholders the wailing and gnashing of teeth is far from over.
Gulf Keystone’s (GKP) board might not be popular among shareholders at the moment, but it’s been left with little choice. The likely trigger of the Book Equity Ratio (“BER”) Put Option, when the company announces its next set of results, is a looming disaster for the company. If activated, Gulf will be required to make an offer to repurchase all of its $250million 13% Notes, issued last April, for $252.5million plus accrued and unpaid interest, at around the end of September. Given that Gulf had cash of $86.3million prior to this morning’s placement, and appears to be burning about $4million a month, shareholders were facing an Afren’esque (AFR) wipeout. After this morning’s actions, at least there is a glimmer of hope.
Gulf Keystone (GKP) reminded potential suitors on Thursday why there was no reason to pay top dollar for it with the news that permission was needed from the 13% bondholders to avert the exercise of a put option which has been triggered by a fall in its asset value.
