I have, for several years, warned that the valuation of Bulletin Board darling Versarien (VRS) was crackers. At one point it reached £200 million. It is currently below £80 million but, given that its core graphene business generated sales of just £27,000 last year and that the cash guzzling PLC is fast running out of cash, I am sure you’d agree the valuation is still bonkers. The company has only achieved such a valuation as a result of a very aggressive campaign of stock promotion which has allowed it to raise large sums, and its CEO Neill Ricketts to dump large bundles of his shares for which he paid peanuts.
Aggressive stock promotion is one thing. We can all take a view on that. When in support of a crazy share price it is an indicator that all is not well. But over the past week I have somewhat upped the ante by accusing the company of Securities fraud. Needless to say some of its moronic shareholders, who think nothing of trolling and harassing both me and my poor wife, are calling for the company to sue me for libel.
Maybe that is what I need to happen for me to finally lance this boil and stop the harassment. I do not use the F word lightly or that often. In this case my allegation, which is demonstrably provable, is that the company has made statements via both RNS and via paid-for podcasts that are simply not true, that this has inflated the share price and that this has allowed the board to sell their own shares but also issue new shares to pay their bloated salaries and other costs at the wrong price. Since my defence here is a demonstrable truth, I would not panic if I got a lawyers letter.
Indeed I would welcome the disclosure process and - as with any company in the position of Versarien - it really would not. There is a third way for the company which is to threaten legal action. It might think that this buys it time and might even scare me to back down. It would be mistaken on both counts. I suspect that the placing it so badly needs would be made more difficult if it brings attention to my allegations with such a threat. History shows that companies that try to silence their critics with legal threats are, almost invariably, very bad investments. Good companies do not attract critics like me and even if they do they can let their financial numbers do the talking, so have no need to threat. With Versarien’s supporters baying for my blood the company is in a bit of a pickle. It has attempted to answer some criticism but with a statement that confirms that it has misled investors with regards to payments made. You could not make this up. Suffice to say the shares are a short, if you can get borrow, with a target price of pennies, if that.
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 and a new shorting piece on Friday, click HERE
Filed under: Versarien, Eurasia Mining, Bidstack, Lyin' James Draper, Sosandar, ShareSoc, N50 website
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