The Evil Diaires: “Funny things can happen”

Mitie (MTO) duly reported this morning on YE 31st March 2015. I had hoped for a disaster to emerge. But no such luck. I still think it is remarkably overvalued at 298p. One Mitie follower points out to me that “long term receivables went up yet again, to £58.5 million. This is an astonishing amount where it is not altogether clear why it is increasing each year, in increasing amounts. Inventories also rose, to a bewildering £11 million. Why? Further, the £20 million entrepreneur fund now set aside is a strange decision. Looks like scope for smoke and mirrors to me. Or is it 2016’s exceptional already lined up?”

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Blinkx (BLNX) also reported on YE 31st March 2015. Here, the outlook is more encouraging in that a thumping loss is recorded which is consistent with the general theory that significant parts of this business are essentially fraudulently operated. It should also be borne in mind that Blinkx faces competition in misleading internet users. So it is not as though they have time to develop a kosher business.

Basically, Blinkx is losing money and has net tangible assets of £75m as against a capitalisation at 35p of £140m. Surely, there all sorts of other companies in which first to invest.

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It was surprising that Chuka Umunna dropped out as early as he did. He had to start as a front runner since he did not know what his power base would or could prove to be. I suspect that having exposed himself he found a poor response with the result that he decided to plead personal reasons as a basis for packing it in. I have no sympathy since his only guiding principle is to promote Chuka Umunna.

I cannot see Liz Kendall building a power base since she seems not to have union backing – without which she has little chance. Yvette Cooper might be taken on her own merits but she is irrevocably associated with her husband, Ed Balls, and that is surely a disadvantage given that it was he with Gordon Brown who set about deceiving the public to raise money which was promptly applied to reckless massive overspending in 1997 to 2010. Although she has at least had experience (unlike all the other runners bar Burnham) and is not stupid she is unlikely to cut it at a visceral level.

So it looks as if Andy Burnham lands this. However, and as I have noted before, I am not an insider and one really has to be an insider to win at this betting.

Finally, there is quite a time before the final furlong is run since, under a timetable drawn up by the party last week, nominations for leader close on 15th June. Members and supporters who sign up by 12th August will be entitled to vote and the result will be announced on 12th September. Funny things can happen.

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About forty-five years ago and sat round a luncheon table I expressed amusement that somebody had gone to the trouble of preparing and printing a fake takeover document of a quoted public company and leaving it in the gutter in Old Broad Street, fairly confident that it would be seen and acted upon. A stockbroker immediately adjacent to me expressed revulsion at my attitude.

Say it had been a copy of a genuine takeover document would it have been an offence to act upon it? I think not since there was no insider legislation then in force – one had merely chanced upon information found in the gutter. And even with the regime imposed by the subsequent insider legislation, the document, being gutter-deployed, was in the public domain and could therefore have been acted upon. Further, I doubt if there was any obligation upon the finder to notify the deemed owner – any more than the finder would be obliged to seek out the former owner of a discarded newspaper.

Of course, one of the chief drawbacks of faked takeover documents/announcements is that they are invariably full of typos and other howlers. Their authors are just ignorant if creative fellows. This seems to have been the case last week with a faked internet-released announcement that PTG Capital Partners would bid for Avon Products, temporarily up 20% on this news release. The trouble is that PTG transmogrified in the text to TPG, a well known private equity operation as part of the authors’ programme to deceive. Further, the mobile number offered to contact the issuer of this bid information was an answerphone service. Still, I expect the authors made money and, equally, I reckon their conduct would have been in breach of UK law and no doubt US law as well. The moral is carefully to study information offered particularly where one has not paid for it.