It is evident to most outsiders looking at the Quindell business that any new strategy being developed by the board, would need to address the perception of the business within the investment market and also for current and future customers.
The following areas need to be addressed:
1. Making Quindell a stock that is of little interest to shorters.
2. Making business easier to understand and to improve standing within the City.
3. Share price to reflect value of the business
4. Access to sufficient working capital to finance the growth of the telematics side of the business.
This is what we know the business is doing to strengthen the business and address the above points.
a) Possible disposal of Quindell Legal Services (See here) could mean the sale of that part of the business. This would make business easier to understand by the City as remaining business would be predominantly a technology company.
b) The possible S&G deal could result in a split of the business with Quindell maintaining a minority share holding of any new legal services business. This would result in a recall of all loaned shares and the closing of shorts.
c) Either the sale of QLS or the split into separate companies would strengthen the balance sheet and provide working capital for the growth of the remaining business.
d) S&G offer price will if rejected or accepted provide a realistic value of the business based on the offer price and due diligence. This should push the share price in a direction that will reflect true value.
e) Appointment of Richard Rose (non exec Chairman) and Jim Sutcliffe (Deputy Chairman). Improves standing within City.
f) PwC review including development of the Group’s accounting policies (RNS dated 12/01/15). This will provide an independent view of the business that will verify one way or the other the business model and Quindells statements regarding the state of the business. We know accounting policies ok as audited by KPMG and await information on what the developments to the accounting policies involve.
Based on the above it is evident the business has done and are doing a lot to address points 1 to 4 above.
In a very short period or time, since the departure of Rob Terry the business has created some solid foundations.