Rarely has Tom Winnifrith's behaviour been so ostentatiously egregious as during the last few days, in his attempts to gloat over the precarious position of Avanti Communications, the satellite operator whose shares he has been attacking for the past two years as lickspittle-in-chief to the short sellers of the hedge fund industry.
On 29 July it was revealed by Sky News that Avanti had been in talks with Inmarsat, another satellite business, with a view to the latter making an offer. This was a blow to Winnifrith's long campaign to destroy Avanti shares, but three days later Inmarsat said the talks had terminated, in an ambiguous statement that implied Avanti had simply made an approach to sell and been rebuffed.
Winnifrith was delighted and spluttered into volcanic form with a headline on his ShareProphets flog-a-blog which read: Avanti Coms tries to spin its way out of trouble - Inmarsat exposes the lie: not bidding".
Winnifrith announced: "Three days ago Sky News reported that Inmarsat (ISAT) had approached Avanti Communications with a view to making a bid. This was, as it happens, not true and today Inmarsat has exposed the lie in full. The story here is not only of the looming financial bankruptcy of Avanti but of its full blown moral bankruptcy too. This is shocking at every level, another milestone for both Avanti and for the AIM Casino."
Winnifrith continued: "So
a) It was Avanti that approached Inmarsat and not the other war round,
b) Inmarsat has not taken long to decide that however much lipstick Avanti is wearing it is still a dog with fleas.
The question Avanti should now answer is
a) has anyone approached it of its own volition
b) is anyone interested in making a bid that will see shareholders receive anything?
The answer to a) is likely to be no, the answer to b is 100% certain to be NO!. To a rival satellite operator Avanti's assets have a value of far less than its debts...and thus the shares are worthless."
Strange, then, that on 4th August the respected finance blog FT Alphaville ran the following headline:
"Inmarsat bid five times Avanti Comms' market cap before withdrawing last month".
It went on: "On Wednesday last week Patrick McDougal, Inmarsat's head of business development and strategy, got in touch with Dominic Lester, joint head of investment banking in Europe at Jeffries & Co, Avanti's advisory. He wanted to table a second offer for Avanti from Inmarsat, after a previous low-ball bid for the rival satellite operator had been rejected. Inmarsat was ready to pay at least 140p a share in cash for Avanti, subject to due diligence. At the time, shares in Avanti were trading just below 30p."
And, according to the FT Alphaville story, which apparently vindicates Avanti: "After the collapse of the Inmarsat talks, Avanti is thought to be in detailed discussions with two other potential acquirers. But it also has the backing of MSST Capital Management, the Boston-based investor which is a substantial Avanti bond holders, as well as holding a 10 per cent equity stake."
That afternoon, Winnifrith was back on the air, covering his back. The FT Aphaville article had to be taken seriously, he said - then added that "my inclination is...that it is bollocks...But it could be one where the Bears clutch defeat from the jaws of victory."
So much for Venal Tom's denunciation of the shares as "worthless". He has not at the time of writing retracted his ShareProphets post.
Who's "morally bankrupt" again, Tom?
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