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Carillion (Construction) shares dive on sales warning


201p

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Wow big fall, from 132p to 14p.

I normally use a 150 day moving average (see this chart earlier up the thread), and stay away from stocks that are downtrending like this. 50p didn't hold - and like with most downtrending charts the odds of picking the exact bottom are against you. So if the price action is below that average, it will take tremendous buying to get that moving average to turn, like an oil tanker.

However if 50p if it didn't hold, you'd be out limiting your risk.

I think I had a look at the possibility of shorting this with IG with dated contracts, but I couldn't. Normally pro money gets to it first, so punters like us generally are left out. If too many people are shorting then IG don't want to let their books become too unbalanced. You could short with a daily funded bet, but interest is charged overnight for holding a in the money position.

It looks like the shorts have mostly closed out now - the low hanging fruit has been taken.

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Debenhams (31p), I can understand, being in the top 5 most shorted, but Premier Oil (103p)? That chart looks reasonable (I may bhe wrong!) and commodities are showing signs of life, after many years in the doldrums.

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Chewing Grass

The financial wizards were operating Carillion with that little cash it basically couldn't even fund itself for 2 days.

Mr Cochrane's witness statement, RBS informed Carillion last Friday that it wanted the company to pre-fund supplier payments made through the bank, which meant it would need to make those payments two days earlier than cashflow forecasts had assumed.

Basically run by financial Spivs and Shysters.

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10 minutes ago, sleepwello'nights said:

Lots  of opinions about the mismanagement of Carillion. Any facts?

I know one of their former accountants. he had a lot to say but i suspect i can't repeat the most recent stuff.

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sleepwello'nights
16 minutes ago, sarahbell said:

I know one of their former accountants. he had a lot to say but i suspect i can't repeat the most recent stuff.

Out of curiousity I looked at reviews on indeed.co.uk. Most were positive towards the company. 

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If they are selling the whole building, you might as well get the freehold. This isn't New York, so why just the lease? This isn't going to be the next Trump Tower somehow.

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  • 2 weeks later...
On 24/01/2018 at 18:36, The Masked Tulip said:

Inside Wales' tallest penthouse which has been empty since it was built almost a decade ago

The lease for Meridian Quay is up for sale for £6.7 million

http://www.walesonline.co.uk/news/wales-news/inside-wales-tallest-penthouse-been-14198606

Can retired miners afford this luxury space?

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On 24/01/2018 at 19:43, 201p said:

If they are selling the whole building, you might as well get the freehold. This isn't New York, so why just the lease? This isn't going to be the next Trump Tower somehow.

 

Based upon this:

Quote

 

Mr Hope said the 45 unsold flats would yield an annual rent of £660,000, and that the buyer would also earn £62,800 per year in ground rent for the whole development.

The buyer of the lease, which has 142 years left on it, will be responsible for the condition of the buildings, fire regulations and insurance and — along with the scheme’s management company — will need to take on ongoing and outstanding schedules of work.

 

 

It suggests that the developers only had a 150 year lease in the first place.

It's a bit odd as usually the freeholder gets the ground rent but in this case it's going to the leaseholder.

I really wonder how this is going to work because the leaseholders of the flats will have the right to extend their leases but the "owner" won't have this roght on the land lease so you will have the land lease running out in 142 years and then then it reverting to the freeholder but with loads of infinitely extendable leases on flats in the tower that it then takes on.

Putting on my contract management hard hat I would describe t as a dog's breakfast and anyone wishing to risk £6.7m of their own money on this should be made a ward of court immediately.

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