I’ve not been following QPP (Quindrell), but must admit that it is becoming quite an interesting case study.
Lucien Miers thinks it’s a short, saying “When a company effectively lectures the market on what its shares should be trading at, trouble almost invariably ensues.”
What is really interesting is a post by Steve Markus on 3 Apr:
Quindell L:QPP win contract with RAC, but grant RAC warrants over 250M shares. Is this normal? http://bit.ly/11kw42y #TMFPP Trading strong.
Bizarre. Some thoughts occur to me. It might be a way for the RAC to obtain some kind of profit participation. Maybe it’s a way for QPP to inflate revenue (the shares effectively act as a rebate to the revenue, but have different accounting treatments). Maybe it’s a way for the RAC to obtain representation of their interests. Whatever the reason, it’s very puzzling why the RAC would get involved in such a highly unorthodox business practise. Couldn’t there be a conflict of interest?
The RNS also makes this baffling statement:
the Board will only recommend amove [sic] to the full list once the share price has been trading at a significant premium to £0.13 for a reasonable period of time to ensure entry into the appropriate FTSE indexes.
Is this code for “RAC want to be able to dump their shares without affecting market prices too much”?
Who knows? The more I read about QPP, the more puzzled I become. The rabbit hole keeps going deeper and deeper.