Sentiment turns on Quindell

After rumours of a cash crunch and an asset fire sale at Quindell the company was forced to issue a reassuring RNS yesterday that it had no current plans to sell its stake in Accident Repair Group. The shares fell as low as 42p on Wednesday, but bounced 30% yesterday on ARG clarification. Last night the FT published an article about the shorting activities of various offshore hedge funds saying that “Now, the Financial Times can reveal that Roble is one of a clutch of shell companies based in the Cayman Islands created by Tiger Global, one of the world’s largest but lowest profile hedge funds. Tiger Global used a series of these structures to bet against at least a dozen European companies, including Quindell”.

So the largest shorter in Quindell, Roble has been unmasked as Tiger Global and today the shares responded positively once again, recently trading at 68p, up 26% on the day with a sense that the worse days of Tiger’s shorting attack on Quindell may be coming to an end.

Since trading around 130p a little over a week ago following a controversial share deal between ex-Chairman Rob Terry and other directors which resulted in Terry’s resignation, the recovery has some way to go. But the speed of the reversal has been quite extraordinary. After all the negative news surrounding the company, the bulls seem to have the upper hand for now. Many are wondering what next on this roller coaster of a share.

Contrarian Investor UK

IMPORTANT: The posts I make are in no way meant as investment suggestions or recommendations to any visitors to the site. They are simply my views, personal reflections and analysis on the markets. Anyone who wishes to spread bet or buy stocks should rely on their own due diligence and common sense before placing any spread trade.