In my view, the "insiders buying is a great sign" rule does not apply when they are doing so at strategic times with insider information that is not available to the market :D
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Whats up with the buyer at 55c?! Orders been there for a few days...
I think VML explained the involvement of the directors well with this "VMob received legal advice on the private placement process which, as previously announced to the market on 11 December 2014, involved negotiations with interested parties to raise the desired capital. Those parties were mostly made up of high net worth individuals and institutions. Some of those parties were keen that VMob directors also participate in the capital raising to demonstrate their confidence in the company and further align their interests with those of other shareholders."
When someone asks me to invest in their business, the first thing I want to know is how much have they invested and why are they not putting in more now. What risk are they taking on or are they just offloading that risk to others. The fact the directors put their money in gives me a certain level of comfort. They do point on in their release that the insider trading rules do not apply to private placements, but that was only to defend themselves against accusations.
I'm not worried and only small amounts involved anyway. I assume once listed in the ASX there will be tighter regulation anyway, so for those concerned about all this then the ASX listing must be good.
What if they answered with:
(1) We know about negotiations of a secret contract with a big company.
(2) We are going to put in some of our own money at 1 cent.
(3) The announcement is going to follow soon after the completion of the placement to us.
(4) It is foreseeable to us and general market principles that the big contract announcement will make the shareprice go higher.
(5) Then we are going to do a capital raising for a 60% premium, 90 days or so later.
When they ask you to invest at 1.6/40 cents in their business, how do you respond?
The difficulty here is the lack of transparency of the contracts. This may be for valid commercial reasons or not but it makes any sort of valuation here impossible.
To compare with XRO, they can announce the number of paying customers and revenue. The value of each XRO customer can easily be evaluated by going to their website and seeing that it costs maybe $30 per month to be a customer. Lots of customers, each paying a low amount. Highly transparent revenue model for someone outside the tent.
VML is completely different. Small number of customers. Just a couple of dozen, isn't it? Contracts are secret so we don't know what they are charging, what sort of volume of transaction each contract is worth, what it costs VML to fulfil their obligations. Nothing. Also losing or gaining a large customer could be a big deal but we've got no deals.
VML could announce a contract tomorrow with Visa and notify NZX of price sensitive information. But it could just be VML issuing company credit cards to all their staff. Or it could be worth $1 million per month. We've got no way of knowing.
Even some transparency around the value of the capital raising would be useful. Is it even related to the current SP? Or just the amount of money sitting the directors' bank accounts divided by the number of shares they want to issue?
Having the one big contract McD's is holding the value down, high risk if they lose it etc etc, another 2-3 contracts the same size and suddenly you have a diversity of incoming revenue and a trend.
No doubt at that point robbo will complain that they knew these where in the pipeline but didn't disclose it.... of course they know what meetings they are in, sales presentations etc etc so do their staff who have access to 34mil options at a pre consolidation strike price of 1.8c... not very motivational if you think this is puppy will still be at 1.8c in 24 months aye...
By then VML will be much higher, alternatively they don't deliver and loose McDs and VML will be much lower , place your bets... the combined 48 million shares the insiders purchased last placement would have been an inward flow of around $480k from the three insiders I linked above.
VMOB have to execute, Robbo will sell doubt on this issue as he can't short he can only buy lower.... he has , I believe, been long before, strange for one who hates the company directors actions so strongly
I checked my portfolio this morning and it said I had made $112,000 on Vml, It appears my shares haven't been exchanged 25/1. Is it the same for everyone else?