Wednesday, January 11, 2012

PTEC: Playtech

Sold my PTEC shares today for about 286p, having realised quite a substantial loss on them. Despite being on a PER of 8, and the prospect of the US opening up, I sold because:
  • dubious corporate governance. The board seem to be the puppets of major shareholder Teddy Sagi. The company has bought businesses off of him.
  • raising capital when the share price is cheap.
  • Slight puzzlement as to why it doesn't want to move out from AIM to the main market
  • On 04-Nov-2011, non-exec director Barry Gibson resigned "to pursue other interests". "I am stepping down from the Board as the increasing demands of my other commitments have meant that I am unable to devote the appropriate time to my duties as a Board member."
  • Concerns over their broker resignation, Deutsche Bank. "There was speculation the split could be linked to a potential transaction that was either opposed by Deutsche or presented the bank with a conflict.". I asked about the possible implications of broker resignations on TMF, and received the rather chilling response: "I have never seen a good outcome when a Broker resigns". I received pretty much the same response in a private email.
Distinct whiff of fish on this one, so I'm out. It also fits a pattern of acquisitions and equity raising that I find suspicious. The share has 19% one-month relative strength, and 13% three-month relative strength, so there's obviously some momentum behind this share. So I certainly wouldn't rule it out going higher.

I used the proceeds to top up on AFF (Afferro Mining) and SHG (Shanta Gold). I'll explain the bull case on SHG in another post.

No comments: