Well, I guess I can be a bit more talkative about this stock no since I'm no longer a company insider.
I'm quite surprised at the fact that it's a pink sheet stock [t]AVFCY[/t] (<span style='font-size:11px'>LAST</span>: 5.5<span style='font-size:11px'> 10/7/2009 1:38:27 PM</span>) (<span style='font-size:11px'>LAST</span>: 5.5<span style='font-size:11px'> 10/7/2009 1:38:27 PM</span>) and iHubbers and some SIers are pink sheet people, but it not only gets very little action, the action it gets doesn't reflect the more credible reality of the action it gets in London. Maybe it doesn't get the anticipated iHubber love because though it's a pink sheet stock, it's a reporting one with what're likely credible numbers, and trades in dollars instead of hundredths of a cent.
It closed at the US equivalent of $6.05 in London today. Yet I was just now able to buy 1k of it at $5.50 here. And still have an open buy order at that price.
My guess is that aside from the matching orders from other marketmakers for my fills, I've been about 70-80% of this stock's volume since the ADRs became available.
So be it. It doesn't cost much to convert it to LSE stock and sell it there at its truer value when it can be bought at decent discounts here. I've decided to effectively become a marketmaker in it through my Wachovia account. On both sides. That's me with the $5.80 sell order too.
It's gone largely unnoticed here, even among what may be the world's largest concentration of users of its products (iHub, streaming realtime quotes directly or via iHub) and definitely unnoticed by marketmakers. As evidenced by the first ADR trade, which was me testing to make sure it worked by placing a $2.50 buy order months ago and though it was even then well below its real value, I got an immediate fill and an effortless 2-bagger.
I'm posting about it not only because I really do find its pricing and lack of activity pretty surprising and feel it represents an opportunity for arbitrage folks or anyone who doesn't mind the extra work of converting from ADR to AIM and back via Bank of New York, but also to make sure to disclose where most appropriate and visible that though I'm an inordinate amount of US volume, I'm not painting the tape. Or at least not artificially. I'm simply trying to take advantage of the disconnect I'm seeing between the ADRs and the stock from which they're derived.
To my knowledge, though it was initially a moral question in which the horned guy on one shoulder beat the snot outta the halo-wearer on the other, it's just not illegal to pick the pockets of inattentive thieves. I've played this game profitably before and found that all you really have to do is just keep sneaking a little bit at a time outta the marketmakers' pockets. Because the instant you make a grab for their whole wallet, they start paying attention and start really playing the game, and I've never been able to beat them at their game when they're at least halfway paying attention to it.
Heck, if I were evil enough and/or smart enough, I'd have let them short most of London's float to me months ago (when I could've afforded most of it), then started placing correct sell orders with my right hand and correct buy orders with my left, and some marketmakers (especially JANE) would be hurting and I'd have already sent an email to the officers of ADVFN announcing that Bob is spelled "Boss" at their company. <g> A short squeeze involving one shareholder and one marketmaker? Looked do-able to me.
That aside, the stock itself (the AIM version, [t]LSE:AFN[/t] (<span style='font-size:11px'>LAST</span>: 0<span style='font-size:11px'> 12:00:00 AM</span>) (<span style='font-size:11px'>LAST</span>: 0<span style='font-size:11px'> 12:00:00 AM</span>) ) has seen a nice climb on strong volume. Better than 100% since the ADRs started trading.
So what I'll start doing with it for a while is paying a little more attention and buying when I can at a huge discount to the AIM price, put the same shares up for sale at something closer to the AIM price but low enough that I can make a profit if I sell them, leaving room for someone else to make a profit converting and selling them in London, or doing the conversion/sale myself if they go untaken for more than a few days.
Though, at least while I worked for them, I would/would've rather seen the LSE stock start making the trip across the pond to become ADRs so that, like with ELN, the US market could become the huge tail wagging the tiny dog. But if it ain't gonna happen anytime soon, I'm going to take advantage of opportunities.
Further disclosure #1: Though I do buy and sell this stock in both markets from time to time and really loaded up on it when it traded around 0.5p in London a while back (those shares nearly an 8-bagger now), overall I'm increasing my already sizable but small enough to not have to disclose position (in London, I think I'd be required to now, but its ADRs I own primarily, so the threshhold is much higher), so I do own a lot of this stock and am almost assuredly the largest shareholder this side of the pond and probably one of the largest over there if I owned the AIM stock. If memory serves, though I don't have as many options that are as low-cost as the officers, I think I own more shares than any officer and perhaps any two officers combined.
And though I haven't done the math lately but will soon since I'll likely excercise and hold or even trade, but as ADRs in either case, I might have something like a million vested share options on the London stock at prices between 2.25p and 3.3p (US equivalent: about 10k ADRs with strikes between $4.28 and 5.25), so all of my options are ITM and I've got about 2 months left to exercise them. So I'm likely to be another UK press release in the near future about a former employee exercising his options.
Further disclosure #2: Though most of the few readers know I left ADVFN 4 months ago and bought Silicon Investor and Talkzilla in the process, it's not because I didn't like the company or its future. I simply wasn't as happy as I wanted to be, having seen the sites and especially my job take evolutionary paths I didn't totally agree with. And fearing for SI's future because its name doesn't have the clout there that it does here, so it had become the red-headed step-child and I seemed to be the only one to know it as the crown jewel of my sale of the companies 3 years ago. The biggest factor, though, is that I was no longer free to be the quick-moving maverick. For so long that it's taking a while to get back to that rhythm but it's happening.
I remain bullish on ADVFN mostly because of their success in Brazil and their having arguably the most bang for the buck available in realtime products integrated into iHub as ala carte items and their surprising but very wise move in ensuring they owned 15% of my new company. My bets aren't safe bets, but I am.
Further Disclosure #3: I have no visibility into anything having to do with ADVFN or iHub, but have 100% visibility into SI and know that, just like in the pre-acqusition days, any change in ad sales performance at SI used to and probably still reliably infers at least half the same change at the far larger iHub.
So when I see that ad sales at SI, still almost exclusively through networks, have grown 50% since my acquisition, I can infer but not guarantee that iHub has seen 25% growth. Its inventory has always been less valuable at the CPM level because of too much stickiness (average pageviews per visitor too high from an advertising viewpoint), but making up for it with massive volume I also can only guess has grown at least half as much as SI's.
Summary: I don't know that I'd be a buyer if not for my seeming license to steal from inattentive marketmakers, but I might be because though I didn't want to work for the company anymore and wanted to go back to my old life of calling all the shots, assure SI couldn't get shot in the head because only I could make that decision, and most importantly to me, experience rewards or suffering solely based on how well or poorly I do.
In the most extreme scenario (I've made these scenarios reality in the past, but this one's waaaay out there), SI thrives under the right kind (for its needs) management again and does so well we repeat the "former employee becomes owner" story again.
A stretch at best. But 4 months ago I would've thought a 50% improvement in SI's ad sales wildly optimistic, and I'm simply no longer incredulous at the impossible happening. Heck, I'm the guy who owned it 2 years after InfoSpace laid me off from it. And sold it 3 years later for a large multiple of its purchase price. Then bought it again at a discount 2 1/2 years later.
That Clem's one savvy SOB, though. That 15% ownership stake was added pretty late but I'm sure it was known from the onset. Unlike Naveen Jain from INSP, that Brit was smart enough to essentially say "You'd rather go back to your simpler and smaller universe you controlled? Cool. Gimme cash and a stake in that universe and not only do you get your life back, I bet you can fatten my pockets in the process." |
