Eugene Tablis of Bergen Global Opportunity Fund must have deep pockets and an even deeper sense of patience considering the today’s equity dilution: he must see value somewhere Motive Television Plc’s business operations.
Normally I’d spend quite a bit of time savaging managements for their leviathan sized equity dilutions of the type we saw today from Motive Television Plc (LSE: MTV).
But frankly if anyone is stupid enough to become a shareholder of Motive Television then they deserve all the value destruction that comes with owning such a dog including the issuance of equity:
The Company announces that, on 26 May 2015, it received a Conversion Notice from Bergen Global Opportunity Fund, LP (“Bergen”) pursuant to the Convertible Securities Issuance Deed between Motive and Bergen dated 12 May 2014 (the “Deed”) to exercise its right to convert £180,000 of existing debt into equity (the “Conversion”). Accordingly, the Company has allotted 1,636,363,636 ordinary shares of £0.00005 (“Ordinary Shares”) at a price of £0.00011 per share to Bergen (“New Ordinary Shares”).
It’s a demonic number on many different levels and following today’s announcement Motive Television will have 18,523,088,789 shares in issue.
Again please someone tell me why anyone would buy the Motive Television shares.
Today’s announcement comes on the back of a placing on 2 April 2015 to raise £1,000,000 to fund the roll out of Tablet TV and for ‘other corporate purposes’.
6,666,666,667 were issued on that occasion.
On another occasion – 2 January 2015 – Motive Television announced that it received a conversion notice from Bergen which necessitated an additional 5,000,000,000 ordinary shares to be admitted to AIM.
There was another one from Bergen on 27 November, this time requiring 3,333,333,333 ordinary shares to be admitted to AIM.
And yes on the 23 October 2014 Bergen again exercised it’s right for a debt to equity swap requiring 849,285,714 shares to be admitted to AIM.
I kinda like the way that Bergen has started of small and has slowly increased the amount of equity dilution on each occasion that it wants to gobble up more Motive Television stock.
There are further equity dilutions by Bergen as a result of it’s agreement with Motive Television further back in time but by now you should be getting the message.
Let’s look at some numbers: the half yearly results released 24 September 2014 for the period up to 30 June 2014:
Not good but it gets worse when you consider Motive Television Plc’s assets:
Those massive intangible assets do not produce cash so they are worthless which leaves £1,384,470 total asset value taken at face value and total liabilities of £5,970,627 leaves Motive Television in negative equity.
It is my belief that Motive Television does not present a good investment opportunity.