Some clown bought a stack of shares in AIM cesspit listed CPP (CPP) on Friday sending the shares soaring. This offers a slam dunk free money opportunity as a bear to short the stock at 4.25p-5.25p. Your upside as a shorter at 4.25p is a gain of between 3.25p and 4.25p. There seems no downside risk.
The facts are that Hamish Macgregor Ogston the founder of CPP and 57% shareholder has until May 31st to decide whether to make a bid for shares he does not own. He says he will – if he bids – pay a maximum of 1p per share. He will only hand over that cash if he gets enough acceptances to take him to 75% at which point he will delist the company.
And so under the Hamish option you get either 1p in cash (maximum) or shares in an unlisted company run by Ogston which will – I suggest – be impossible to liquidate. The market price ahead of delisting will thus be c 0.8p-1.2p.
Option 2 is that Hamish walks away.
on Shareprophets | CommentsFiled under: