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Best of the boards: Blinkx, Quindell, Gulf Keystone Petroleum
It's been a busy week on Interactive Investor, with discussion board darlings Blinkx, Quindell and Gulf Keystone Petroleum garnering some headlines.
After a challenging 12 months, Blinx issued another profit warning, splitting users on the discussion board. Another firm rocked by short sellers this year was Quindell, which had to release a brief statement devoiding itself of any knowledge as to why its share price had reached a 14-month low, not exactly the direction it was hoping for.
And lastly, Gulf Keystone Petroleum's share price enjoyed a rare boost on Wednesday with a production and sales update, despite some on the boards not thinking too much had changed.
What happened: Few companies have had a year like Blinkx (). Shares in the video search engine have plunged by over 80% in 2014 to 30p, hammered by a string of profit warnings and a hugely damaging blog from Harvard Business School professor Ben Edelman. Well, they've warned again, and with first-half profits wiped out, the business could be worth little more than the cash in its pocket.
Blinkx had already flagged up a sharp slowdown in revenue growth and now expects half-year sales of just $102-104 million. Last year's $18.1 million (£11.15 million) adjusted cash profit will disappear, too; management expects to only break-even during the period.
Thankfully, the company still has $115 million of net cash, currently worth 18p a share. "This should represent a realistic lower boundary for the equity as the market absorbs fresh negative news," says Citi.
Of course, bosses remain optimistic. "Blinkx has seen sequential month-on-month growth since July, and management believes the company has reached an inflection point. Mobile remains a high-priority area for operational and strategic investments and is expected to contribute approximately 20% of revenues during the period."
What users said: Opinions on the Interactive Investor discussion board varied, with some bemoaning the trading update from the video search engine firm, some speculating about a possible takeover and others being more upbeat.
'Willow67' said: "Awful trading update, albeit with a small silver lining about a possible inflexion point. Shares will get hammered today I would imagine". Blinkx's share price fell by almost 10p on Wednesday.
'Altube' was more upbeat: "This is what the market will look at. There are some real positives here. Cash is the same so managing to operate without need to dip into funds. Outlook good, a great recovery play, just wish I had more money."
Users also thought Blinkx had become a possible takeover target.
"With a market cap of £120 million and cash of £71 million and revenues of say $210 million (£130 million) this could be a good buy for the likes of Yahoo (YHOO)who would strip out costs and integrate Blinkx into its operations," explained 'dallo'.
And 'Largey' said: "I believe that Blinkx is being primed as a takeover target. Raj [Raj Chellaraj, non-executive director] maybe the man to broker a deal with Yahoo!"
What happened: Insurance outsourcing group Quindell (QPP) has been minding its own business for the past few weeks, certainly doing nothing to rock an undeniably fragile boat. Despite this, however, the share price fell every day last week and by 9% on Friday to a 14-month low, taking the weekly plunge to 18%.
It was sufficient enough for management to issue the briefest of statements on Monday:
"The Board of Quindell, a market leading global provider of professional services and digital solutions, notes the recent share price performance and confirms that it knows of no reason for such falls.
"As originally planned, the company will update the market on or before 15 October 2014 on its trading for the quarter ending 30 September 2014 and the continued positive progress being made by the group in respect of all key performance indicators including cash performance."
At the end of last week The Lawyer reported that Quindell personal injury legal competitor Slater & Gordon is buying Cardiff-based occupational deafness specialists Leo Abse & Cohen, S&G's seventh acquisition since entering the UK market in early 2012.
"This is important because the weakness in Quindell's share price over the last few months partly reflects investors grappling with the economics and value of the group's expansion into Noise Induced Hearing Loss (NIHL)," says Cenkos. "There have been an increasing number of data points highlighting the growth in the UK NIHL market and M&A like the SGH deal is additional validation of the opportunity."
What users said: Despite some suggesting that Quindell's statement appeared a little desperate on the discussion board, most users remained positive on the stock - the consensus was a 'strong buy'.
"That RNS strikes me that management are running a little scared and will do anything to attempt to influence any falls or otherwise in the share price," said 'bulltraderpt'.
'5 Iron' replied: "Don't think so Bulltrader - looks like the biggest hint to buy that I have seen - while we can at these prices!"
'Bistable' took a more measured approach: "After such falls this year is it any wonder they are scared as we all are who are long investors.
"To say they know no reason I guess is the standard wording when they know nothing inherent in the company’s operational or trading performance that warrants such recent drops.
"However, there must be a reason for the falls and the clever people at Quindell and their brokers must know what they are and you would think there must be some explanation regarding blogger and market activity that seems to have created such a fall but perhaps Quindell feel it is not their place to comment on these - but why can't their brokers say something?
"The reassuring part of the RNS is obviously the restatement that KPI's such as cash flow seem to be on track but we have seen such statements by others only to see a subsequent contradiction but let’s hope that does not happen here."
'Clued-in' understood why the outsourcer issued a statement.
"More detailed results are coming within two weeks, I can't blame the board of directors issuing a brief statement. They have a company to run and the bloggers seem like an annoying fly to them, well maybe wasp!"
'Chris Lines' shared this view: "Agree the RNS today [Monday] has provided a comfort to many scared private investors who might have been thinking of selling that’s unlikely now ahead of the next news flow.
"The bears won’t give up until they are defeated, whether they attempt another raid before the next news flow wouldn't surprise me, no doubt the blogger has some more scare stories to spread but if Quindell keep delivering then the bears are running out of time and will need to close before they get squeezed."
Gulf Keystone Petroleum
What happened: Gulf Keystone Petroleum (GKP) shares received a rare boost on Wednesday with a brief update on production and sales at its flagship Shaikan field in the Kurdistan region of Iraq. Staffing levels are, at least, back to normal after recent violence forced management to warn that plans to double production there could be delayed.
Since the end of August, production has averaged 23,000 barrels of oil per day (bopd), still some way short of the 40,000 bopd target. Management has already admitted that it's unlikely to achieve that level of production until the first quarter of 2015, but has failed to shed any further light on a possible date.
About 70% of current production is being trucked to export terminals at the Turkish port of Dortyol and sold by the Kurdistan regional government's Ministry of Natural Resources (MNR). However, GKP still hasn't been paid for any of this, and talks with MNR about a payment cycle for past and future Shaikan exports "are progressing."
The other 30% is being sold to local buyers - they've bought about 220,000 barrels since 28 August. That's generated $9.4 million in gross revenue of which GKP has received $5.9 million.
Westhouse Securities need more convincing. "We remain cautious on GKP and see Genel Energy (GENL) as a better way to play the resource opportunity in Kurdistan." It rates Genel a 'buy' with 1,100p target price.
What users said: Despite a large number of negative comments on the discussion board the user consensus was a 'strong buy'.
'Pipos' got a real sense of "déjà vu".
"I'm sure I've read that RNS about three years ago. Expect to hit 40,000 bopd and get paid soon."
'AUDIRS6' added: "Selling oil to the domestic market at a great discount and a one liner mentioning AB [Akri-Bijeel Block] is meant to reassure the market that everything is dandy? If this is the best they've got to calm nerves down then we're in more trouble than I feared."
'GCCR' joked: "The RNS can be summarised as..... 'Nothing much changed really'".
Some users were however more positive.
"Each to their own but I find this a good, timely and positive RNS," said 'umr11'.
"In war zone operations are going well, all staff are back, producing and selling.
"Also good to see JG [John Gerstenlauer, CEO] reinforce prudent expenditure management which is a good change from the Kozel days when GKP was used as a personal bank," added the user.
And 'Thedarkkn1ght' said: "Quite good RNS in my opinion, but long overdue. Some payments are at least coming through even if they are through domestic sales. GKP have been specific with the amounts also which does not always happen."