Quindell Portfolio, Bulletin Boards on fire, shares continue to fall.

The sorry case of the falling share price of Quindell Portfolio continues to heat up debate on various investment bulletin boards around the web. I spent a little time yesterday reading the comments on a couple of boards, it was almost a running commentary as the share price continued to fall, ending the day a little under 6p, just about half its price of 3 days ago as bulls and bears of the stock slugged it out.

What came across however, was the almost despair of those that were invested in the stock or who had topped up as the price fell. They were catching the proverbial falling knife on a regular basis, only to see it go down further as more sellers came in.

A company RNS was issued on Thursday night regarding the 30%+ fall that happened on that day. it was meant to put a line under events - it didn't.

The Company is aware of recent press speculation regarding the equity swap and an active short position in relation to the Company's ordinary shares. In light of this, the Board wishes to clarify that further to its recently reported record results, the Company has a strong balance sheet and continues to trade profitably with significant traction in the insurance sector.

The Company knows of no valid reason for the recent share price decline. Furthermore, the equity swap asset, which has also been subject to speculation, accounts for a small part of the Group receivables and is not a material contract in relation to the size of the Group.  This was issued as part of the funding for the acquisition of Accident Advice Helpline, announced on 3 December 2012 and was deemed to be the least dilutive funding mechanism at this time. It is not currently being exercised, and the Company believes that the counterparty will continue to not make any material transactions in respect of the Company's ordinary shares unless the share price is at substantially higher levels.

http://www.digitallook.com/news/rns/20886456-2564291/QPP-Clarification_regarding_press_speculation_html


At the time of the news release there was much talk from buyers of the share that this would put an end to things, that the following day the shorters would get their fingers burnt. Well, initially the share price did rise on Friday, around 12-13%, only to fall back heavily as the day went on finishing around 18% down. Buyers were caught it would seem in a classic bull trap, they thought the falling knife had hit the ground and price was on the rebound, 10p, 11p here we come, shorters take that. Instead the shorters ultimately won the day, buyers would be nursing their losses and hoping that long term the bull case of the fundamentals for the company holds up. It's just about all they have got left.

Emotions seemed to be quite heated, investors in the company saved their wrath for the shorters, Evil Knievil, the day traders, the market makers and some web based writers who had gone full throttle against what they saw as unacceptable behaviour by the company. There is nothing like losing money to raise the emotional bar of debate, especially when both sides are convinced that they are right.

As for Quindell, there was lots of comment that they need to come up with another RNS, answer some of the critics, after all if they have got nothing to hide or fear then you would have thought that they would be looking to release something more substantial. This is a company with ambitions to be a FTSE250 company so they need to be squeaky clean if they going to get that invite. The rot needs to be stopped and a falling share price of this magnitude is not only not good for business, it is likely to put off others from wanting to do business with them until there is some clarification from the company that refutes the critics.

Still, Monday is another day and no doubt the battle between the bulls and bears, the long term committed and the short term sellers will start up again. Who knows how it will end?