The 5th November RNS
1) Directors of Quindell have invested over £3m in shares during the last 12 months.
The board you would think could not give a stronger indication of their confidence in the company.
2) Money locked in.
Directors buying shares is a huge commitment. When the share price rises they can not easily realise any profits as this sends the wrong message to the market.
The 5th November RNS also locks in 52 million shares valued at c£64m put up as collateral.
Point 1 above is a big enough commitment (£3m). This however is an exceptional commitment.
The board are in effect putting their whole investment on the line to demonstrate their total commitment to the business.
Private Investors can move on whenever or whatever happens. The Directors of Quindell do not have that safety blanket. What more could a private investor ask from the Directors of the company?
The board have provided c£64m to obtain £2m to purchase shares in the company. This is disproportionate and indicates the Quindell Directors have the facility to draw down additional resources to purchase more shares when they feel appropriate.
Note the word initial in the following statement from Rob Terry.
“We are pleased that we have been able to secure funding to allow us to take advantage of this buying opportunity and to make these initial significant purchases of stock at these levels.”
Some detractors have inferred Rob Terry has not made any commitment to the business as he is using borrowed money. This is in my opinion rubbish as Rob Terry stands to lose c£59m (value of his 45m shares).
Directors have made a significant commitment, providing a visible indicator to private investors as to what the future holds for Quindell.
It is only a matter of time before the bonfire becomes a furnace as shorters exit, new investors invest and future RNS’s fan the flames.
This RNS is a game changer for the share price.
Note: If you want up to date information on Quindell or news that impacts on the Quindell business I strongly recommend you look at Word on the Street an electronic newspaper. Please click on the following link.