The Evil Diaries: “What I seek is scandal or sex”

Late on Friday last, GCM (GCM) offered two RNSs. The first was the advice that GCM had borrowed £3m for two years with no interest payable. However, the lender “has the right to convert the outstanding balance at a subscription price of 11p”. Shares thus derived are locked up for two years running from the date of the conversion. GCM has reserved the right to “settle” the loan if GCM elects to do so. I am unclear as to how that election might emerge. After all, the funds to enable repayment would have to be raised from current shareholders who, presumably, would only feel thus minded if the share price were better than it is or GCM’s prospect could be reckoned to be worth the candle – by which point one rather imagines that the unsecured lender would have converted.

Anyway, this RNS was succeeded by another RNS advising that the management had awarded itself options over a further 2,150,000 shares at 11p and favourably amended (from the point of view of the management) the terms of already extant management options. I only mention the order of the RNSs since the awards  considered in the latter RNS would have attracted some management enthusiasm had they known of the loan being completed. I am not being pernickety but one does wonder.

The effect of all this is that whereas GCM now has 63m shares in issue this figure will rise in effect by c. 37m to c. 100m shares and there will be enough betting money for at least two years. Even so, the capitalisation at 14p will be just c. £14m. And it will all swing round pressing ahead or not at the coal prospect. I myself cannot begin to imagine how the Bangladeshi government can avoid opening up Phulbari. But it would be a foresightful bunny who claims that it will happen in the next two years – if past conduct of the Bangladeshi government is any sort of guide. Anyway, I bought 100,000 GCM at 13.25p just to keep my hand in. Greed compels this since these shares could be many many times the 13.25p if Phulbari succeeds financially. Others who are more cautious might merely hold on tight to Polo (POL) which holds a chunk of GCM and is in any event, at 6p, very cheap.

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You could have knocked me over wiv a fevva as I this morning read the 400p bid for Plus500 (PLUS). Anyway, it happens. I hope nobody has been too badly burnt and I harbour the possibility that one or two punters have come out some way ahead.

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Readers may recall that last week I invited helpful comments on 020 7835 0868 and cawkwell@btinternet.com. A couple of respondents took the opportunity to ask for valuation updates. I regret that I cannot entertain this style of contact. What I seek is scandal or sex.