There is borrow so don’t hold back. The market cap was £28 million at a 0.305p share price when this piece first appeared. The shares are now 0.285p but this could go all the way... Vast Resources (VAST) is one of those AIM penny dreadfuls that always burns cash and never delivers. Its management are ninth rate but you say so what? Why pick on this company when there are so many like that. Four reasons:
1. This company will never generate cash especially as there seems to be some uncertainty over its control of its assets Zimbabwe. As such the valuation is crackers.
2. Vast is reliant on death spiral funding arriving and has been saying for a long while that the cheque is in the post, having signed documentation with Atlas Capital Markets Limited. A search of Companies House though shows a very small company with a balance sheet consisting of just £10,000 in cash. The phone number of Atlas Capital Markets on its website is disconnected. If the cash does not arrive, and the endless delays do not suggest that it is certain to arrive, Vast is utterly screwed.
3. If the cash does arrive this is a classic death spiral, a rolling maul of selling. Some providers of such finance, Riverfort for example, work the facility so as NOT to screw the share price. But when you are dealing with folk who can’t even get their phone connected the nature of the facility is bound to be one that screws the share price big time.
4. I am reliably informed that the company is paying £1000 a month to at least one fellow, by the name of Lee Morris, to post ramptastic comment on the LSE Bulletin Board. Good companies simply do not behave in such a manner.
Such desperate steps to support the share price are at best unethical and certainly unsustainable. A massive red flag and Vast is a slam dunk short.
This article first appeared on the N50 website which Tom Winnifrith runs with Steve Moore & Lucian Miers. To access the website ahead of the next share tip from Tom & Steve within two weeks and a new shorting piece from Tom and another from Lucian this week click HERE
Filed under: Vast Resources, UK Oil & Gas, Future, Motif Bio, ShareProphets Radio, N50 website
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