In for a penny, in for a pound: An extract from the diaries of Evil Knievil

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The man the Daily Mail dubbed “The King of the Short Sellers”, Evil Knievil (aka Simon Cawkwell) is Britain’s most feared bear-raider. A big man with a bigger reputation, Evil Knievil famously made £1mn by short selling shares in Northern Rock during its collapse. He also uses his knowledge and experience to buy shares, often resulting in the same devastating effect.

Three times a week Evil provides his thoughts and musings on the markets only at theevildiaries.com. Read an extract from Evil’s latest diaries below and click the banner at the bottom of the page for a free trial to the website…

I have had a couple of Plus500 (PLUS) shareholders on the telephone holding comfortably in excess of 500,000 shares. Of course, I could not prove anything but I did stress that they must like high risk investing. One point that emerged was that Plus500’s cost per account recruited is 550 euros whereas IG’s similar cost is 2,000 euros. But I am not convinced that Plus500’s business is real whereas IG’s is undeniably solid.

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Phorm (PHRM) report on figures up to 31st December last. They are grim. However, the user numbers are clearly now rising very rapidly and although Phorm will have to raise serious cash by 1st August it is possible that Phorm is going cash flow positive in the not too distant future. Is it a buy at 11p? I really do not know.

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I offer the following summary note on Bowleven: BLVN is capitalised at 39p at £126m. They have just sold two thirds of an asset in Cameroon (political risk) for £147m cash (held in London) keeping the other third for free but valued on the deal basis at £73m.

BLVN already have cash of £10m+, no debt and other assets which are worth whatever but here taken at NIL.

BLVN’s overheads are perhaps £8m p.a.. So, if they fool around, a bidder will emerge and if they do not fool around a bidder will still emerge. There is no evidence that the BoD are crooks although it must be said that they have attracted a torrent of abuse. I am no judge as to whether harsh criticism is in order. In any event, I do not care.

All in all, net assets are £230m+ and, sooner or later, probably sooner, the share price will move up closer to perhaps 70p. Some dream of considerably more.”

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Elsewhere, I bought 1m Audioboom (BOOM) at 6p. This is to prove an explosive experience since, apparently, the target is 20p.

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Finally, Goldman Sachs opined that Brazil was a 48% chance to win the World Cup at the outset. One has to marvel at this claim in the light of the last gasp win against Chile. However, I increased my bet on Brazil to £10,000 at 3/1. In for a penny, in for a pound.

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