Quindell Plc QPP

Quindell Plc (QPP) Shares Slump Amid Resignation Of Broker

Quindell Plc announced Monday that Canaccord Genuity Limited resigned as one of its joint brokers, sending shares down by as much as 24% and extending a torrid fortnight for the beleaguered insurance outsourcer.

The past few months have been disastrous for the insurance claims processor as its market value has lost over £2 billion since a short-selling attack in April.

The latest upheaval

Quindell Plc announced Monday that Canaccord Genuity Limited submitted its one month notice of resignation as the insurance outsourcer’s financial adviser and joint broker on October 21, 2014, but that the company has agreed that the resignation is effective today.

The firm’s share price took a hammering in recent days. Its largest institutional investor Fidelity revealed last week that it had almost halved its stake to 4.9% from as high as 9.8% at the end of June.

Quindell’s shares have plummeted over 48% in the last seven trading sessions.

The insurance outsourcer’s sole remaining broker is Cenkos Securities. Earlier Canaccord had issued a series of “Buy” recommendations on Quindell’s stock, the last of which followed the outsourcer’s announcement that it had signed a telematics deal in Canada with a major insurer.

Quindell denies need for additional cash

Yesterday, the Sunday Times reported that the beleaguered insurance services company has opened talks with at least two hedge funds in recent weeks about a potential cash injection. Apparently Quindell went to the hedge funds after failing to interest banks in a deal. However, Quindell insisted that it had no need for additional cash.

Last Monday, Quindell’s shares dropped nearly 19% after it was disclosed that it faced questions over a loan agreement facilitating its chairman and two others to purchase the company’s stock. The same day, the company went into damage control mode explaining what was likely to happen to the shares over which Equities First Holdings (EHF) now has the rights.

Last May, Quindell was forced to clarify its use of a derivative to complete an acquisition, having initially incorrectly described the instrument to analysts. This year it abandoned a much-vaunted plan to move to a listing on London’s main stock exchange, following the release of a dossier of allegations from short-seller Gotham City Research.

In April, U.S.-based Gotham City Research released a scathing report suggesting that Quindell’s reported profits are materially incorrect, its operations are exaggerated, and its shares are worth no more than 3 p per share. However, the insurance processor successfully sued for libel over the report.

LEAVE A COMMENT


X
Saved Articles
X
TextTExtLInkTextTExtLInk

The Life and Career of Charlie Munger

Charlie is more than just Warren Buffett’s friend and Berkshire Hathaway’s Vice Chairman – Buffett has actually credited him with redefining how he looks at investing. Now you can learn from Charlie firsthand via this incredible ebook and over a dozen other famous investor studies by signing up below:

  • Learn from the best and forever change your investing perspective
  • One incredible tidbit of knowledge after another in the page-turning masterpiece of a book
  • Discover the secrets to Charlie’s success and how to apply it to your investing
Never Miss A Story!
Subscribe to ValueWalk Newsletter. We respect your privacy.

Are you an intelligent investor?

ValueWalkPremium is a website and newsletter for smart investors like yourself. We focus on the latest hedge fund industry news much of which is not in the public domain and obtained via our sources.

We also have 10 years of resources on how to use this information to better your investment process.

Sign up for  today for only a few dollars a day and get a 3 day no obligation trial with a targeted 20% discount coupon code.

Cancel anytime during trial and you are never charged.

Limited time offer: For first 50 subscribers

0