Technical analysis of stocks live office. The Central Bank uncovered a large-scale scheme to lure investors to the stock exchange

One of the oldest investment companies in St. Petersburg has lost its license. The multimillion-dollar interests of its clients, several hundred ordinary citizens, were under attack. The financial broker burned out on stationery supplies, or more precisely, on their bankrupt seller. Our story today is about how office paper clips led to big trouble.

Illustration by Max-Griboedov/shutterstock.com

St. Petersburg stationery supplier Live Office was founded in 1996, the company was originally called Spence. The company grew, opened divisions in Moscow, Smolensk and Tver, employing about 300 people.

The key date in corporate history was 2013. Then a block of shares of this company was placed on the Moscow Exchange, they were sold at 129 rubles per share. The company raised 516 million rubles, investors bought 33% of the authorized capital for this money. The company was valued at 1.5 billion rubles. At the same time, “Live Office” guaranteed investors that if a year after the placement the shares fell significantly, they would be bought back for 100 rubles.

In our country, going to the stock exchange to invest is a rarity. Especially if the company offers for sale not bonds (debt securities with a clear yield and a clear maturity date), but shares (securities that do not guarantee anything, but provide a chance to receive dividends and increase the market value).

Investments in these types of new structures can be very profitable, but are almost always very risky. So “Living Office” is now on the verge of bankruptcy, the current stock quote is about thirty times lower: 4.3 rubles. Over the past 12 months they have depreciated by 88%, the buyback period is long over.

At the end of October, the company was supposed to hold a meeting of shareholders, and liquidation of the company was on the agenda. The next day after the meeting in the office (which still sells office supplies), we were told that “we used to be part of the group, but now we are a completely different organization,” and the contacts of the “Live Office” were unknown to the employees. “Where has the circus gone, was it there yesterday?” - the author of these lines involuntarily remembered an old song.

The story, as we understand, did not end with the bankruptcy of the stationery seller. In mid-October, one of the most famous investment companies in our city, Eltra (which has existed since 1992, virtually as long as the modern securities market), lost its broker and dealer license.

The Bank of Russia withdrew them because it believes that, being a market maker (mandatory holder of buy and sell quotes) for Live Office shares in 2014, Eltra manipulated the prices of securities. This resulted in harm to investors not affiliated with either the issuer or its broker.

By the time Eltra took over regulation, the shares had already depreciated by half. During the market-making period in 2014, Live Office quotes jumped from 60 to 135 rubles, exceeding the offering price.

Was that growth artificial? After all, this looks like a classic financial scam: fake players resell the same package to each other, falsely inflating quotes until someone from the outside believes that “the shares are growing all the time” and buys them foolishly, after which the organizers of the scam will disappear. If such a maneuver was invented by the heroes of our story, then who exactly organized it? Now we are unlikely to get an answer to these questions.

So far, the collapse of Eltra has not caused social consequences, unlike the recent story with the St. Petersburg investment company Energocapital (which we described in detail on the pages of St. Petersburg Vedomosti). The key difference in the situation: Energocapital clients’ securities disappeared from their brokerage accounts, while Eltra’s clients’ securities remained in place.

The above-mentioned company notified clients that it accepts instructions for the withdrawal of funds and securities. This means that the client finds another licensed broker, enters into an agreement with him and transfers assets to a new brokerage account. The operation is not free, but it is better to pay a little than to lose everything.

This is how the general director of the investment company Eltra, Sergei Roshchin, commented on the situation to our newspaper: “We do not plan to sue in an attempt to return the license, although we do not consider ourselves guilty. But it will be too difficult to prove your case in courts that do not have much experience in cases related to securities. It’s easier to get a new license.”

According to Sergei Roshchin, the operations to support the market, which the broker is accused of, came from the client’s account. This was a common practice in 2014, although it is now considered vicious. Eltra had about 400 clients, and in addition to losses in the form of fees for transferring securities, those who worked in the futures and options market (these are derivatives) suffered from the sudden revocation of the license. “The Moscow Exchange forcibly closed positions on them, although it could have given time until January 20, 2017 (the period that was provided to us by the mega-regulator for settlements with clients),” the general director concluded.

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We often receive letters with questions about the most risky stocks, in which you should not invest money. In fact, the question is quite useful, especially for people who are taking their first steps into the world of investment. Most newcomers to the market, who have not figured out how to correctly assess the fair value of a company, select shares to buy based on charts. Their technique is simple and only involves looking for stocks that are at multi-year lows. Looking at the charts of stocks that are expensive, they think that it is too late and risky to buy them, due to the possible decline after such a significant increase.

This technique carries the greatest risks imaginable. Almost all such investments result in a significant or complete loss of the money invested. The stock market, although irrational, in most cases fairly estimates the value of companies. If a company's stock price has dropped 90%, it likely means it's in huge trouble.

This article was written for those who have not yet figured out the issue of choosing the right stock to buy for their portfolio. We have made a list of risky investment companies that you should not invest your money in and briefly wrote about the reasons.

Which stocks should NOT be bought in 2017-2018 (Never).

TRANSAERO. Previously, the company was the second largest civil carrier in the Russian Federation. At the moment, TRANSAERO is in bankruptcy proceedings. The company's shares collapsed from 210 rubles to 2.7 rubles. Claims from banks fell on Transaero in 2015. The likelihood that the company will restructure its debt and be saved is extremely low. Due to the fact that investing in this company is associated with high risks, it is not worth buying TRANSAERO shares. Most likely, TRANSAERO shares will soon be delisted from the stock exchange.

Take a walk. The Razgulay agricultural holding is in a state of bankruptcy, while the main creditor of the company is the promising agricultural holding company RusAgro (represented on the MICEX as AGRO). Let us recall that in 2009 Razgulay defaulted on its bonds. The company will soon be liquidated. We can definitely say that you should not buy Razgulay shares.

GTL. The company was founded in 2000 and is engaged in the development of various venture projects. This company's shares have low liquidity and are often subject to speculative behavior, which can be seen in the stock price chart below. Over short periods of time, GTL stock can skyrocket and fall thousands of percent on low volume. There are no prospects for growth of the company's capitalization. Due to the unpredictability of the behavior of shares on the stock exchange, the MICEX placed GTL shares in the sector of companies with increased investment risk. You should not buy GTL shares for your portfolio.

GlavTorgProdukt . The company is engaged in the supply of fish and the production of fish products. GlaTorgProduct is a classic, yet another opaque company on our stock exchange. The company's quotes collapsed from 40 rubles to 1.5 rubles. The company does not generate profits and does not pay attention to its shareholders. The latest news that was published on the company’s website dates back to January 23, 2015. We believe that investing in shares of the GlavTorgProdkt company is not worth it.

Live office. The company sells office supplies to various companies for their offices. It would be correct to name the company dead office, since the company is currently in bankruptcy. The living office is a striking example of how ordinary people were sold shares at an IPO at an exorbitant price, which subsequently collapsed by 98%. You can read more about the living office in our article.

Far Eastern MP. We would not recommend buying shares of the Far Eastern Shipping Company due to the risks associated with an extremely high debt load. Recently, there has been speculative growth in FESCO shares, but we must not forget about the company's problems with debt servicing. In May 2016, FESCO defaulted on its BO-02 bonds. There are many excellent securities on the market that are worth investing in, so until debt problems are resolved, you should avoid buying shares of the company.

Secondary resources . In 2012, on the eve of the IPO, the broker finam (also conducted the Live Office iPO) called Vtorresursy a rapidly growing star. A special conference was held, where they said that huge demand was expected for the shares of the company, which was called innovative. Listen to this word - innovative. If you look at what such a promising innovative company does, it turns out that it is an ordinary scrap metal collector. It would be correct to call Secondary resources a fast falling star. If you look at the stock price chart, I think everything will become clear.

Remember the main thing - never listen to anyone and always do a critical analysis of the company before buying its shares.

We hope that this article will be useful to you and that you will never buy shares of any company using only stock price charts for analysis. In this work, we have given only 7 examples that we considered the most risky, but in fact there are several more dangerous companies for investment. One of the goals was to show you what sad consequences happen when investing is blind and not subject to critical analysis. It will be great if you think, comprehend and criticize some of our ideas. This whole thought process will make you a strong investor. When will you become an investor with a capital letter? AND, don’t be lazy and help other beginners in this difficult but important matter. Together we will be cooler.

For the first time, the Bank of Russia revealed a scheme for placing shares using its own borrowed funds. Having gained access to the stock market, the company raised funds from private and corporate investors for several years

Photo: Ekaterina Kuzmina / RBC

The Central Bank uncovered a large-scale scheme to manipulate the shares of JSC “Living Office”, thanks to which the company attracted funds from institutional and private investors on the Moscow Exchange. As the regulator reported on Thursday, October 20, in July 2013, the company placed 33% of its shares worth over half a billion rubles on the stock exchange in the Innovation and Investment Market sector. The price of one share was 129 rubles. The agent and organizer of the transaction was Eastland Capital. The underwriters and co-organizers are Finam Investment Company, Alor Invest, RFK Bank, Dokhod Investment Company, and KIT Finance.

As the Central Bank found out, the main buyers of shares during the IPO were companies associated with JSC Zhivoy Office - Priboy LLC, Modern LLC and Vershina LLC. These companies purchased shares with borrowed funds from an offshore company. “OJSC “Living Office” actually repaid this loan through persons associated with it within a day. Thus, the placement of shares, contrary to the official statements of the issuer, did not lead to the actual raising of funds,” the regulator points out.

The press service of the Central Bank told RBC that such a scheme for placing shares using its own borrowed funds was discovered for the first time. Having gained access to the stock market, the company attracted funds from private and corporate investors for several years. Two investment companies that participated in the placement reported to RBC that shares of Live Office were purchased by their individual clients after the placement.

After the IPO, manipulations were carried out with the company’s shares throughout 2014, which, according to the Central Bank, were carried out by two groups of persons associated with the Live Office. The scheme involved individuals, companies that bought shares at the IPO, representatives of the subsidiaries of the Live Office, as well as the management of Eltra Investment Company. Their share accounted for only 56% of the trading volume in shares of JSC “Living Office”; the share of companies affiliated with the issuer accounted for 87% of all exchange transactions.

At the same time as creating the appearance of an active stock market, part of the additional issue was sold to third-party investors, the regulator notes.

The company occupied a significant share in the stationery market of St. Petersburg and the Leningrad region, it had serious business plans, good financial indicators, so some clients believed that its shares would grow, recalls Vladislav Kochetkov, president of the board of directors of Finam. According to him, that’s why the Finam structures issued a loan to the Spence company, a subsidiary of the Living Office, in the amount of 150 million rubles. The loan was issued on the security of shares traded on the stock exchange and guarantees from the company's top management. The company did not repay the debt, and now Finam is trying to collect it in the courts. “Receiver proceedings have been introduced against Spence, since in addition to the loan from Finam, the company also raised a loan of 100 million rubles. at Fondservisbank."

In February 2015, the Central Bank introduced a temporary administration into Fondservisbank, and in April the Central Bank allocated 66 billion rubles. for the rehabilitation of Fondservisbank.

The “Living Office” and the structures controlled by it are now virtually in a pre-bankruptcy state. “We believe that there are signs of deliberate bankruptcy of the company, and we will defend our position in court,” Kochetkov said.

As of the date of the latest IFRS reporting (June 30, 2015), the Living Office company showed a net loss of about 38 million rubles; as of October 20, 2016, its shares on the Moscow Exchange were trading at 3.7 rubles, which is more than 30 times below the placement price.

As follows from the company's materials, Zhivoy Office OJSC plans to consider the issue of liquidating the company and appoint a liquidator at the shareholders' meeting on October 25.

The main owners of Live Office are its CEO Valery Parfenov (32.2%) and Chairman of the Board of Directors Alexander Khomylev (29.1%) according to the list of affiliates as of March 31, 2016.

Based on the results of the inspection, the Bank of Russia decided to cancel the licenses issued to JSC IC Eltra, and also recommended that the Moscow Exchange consider the issue of delisting the shares of JSC Living Office.

“The issue of ceasing trading in shares of JSC Living Office will be considered by the stock market committee,” an official representative of the Moscow Exchange told RBC. According to him, according to the listing rules, delisting occurs three months after the relevant decision is made. He also noted that this is the second such case when, on the recommendation of the regulator, shares are delisted. The first case was related to violation of information disclosure requirements of PRIN OJSC, trading in shares of which will be stopped at the end of October, the stock exchange reported.

“In the event of delisting, investors will most likely lose all their invested funds, but the regulator’s actions are justified, since it acts in the interests of a wide range of investors who may also lose their money by trying to make money on the shares of Live Office that have fallen in price,” RBC said top manager of a large investment company.

The Bank of Russia drew the attention of the exchange to non-market pricing of a financial instrument, the press service of the Central Bank clarified to RBC. Such a complex scheme for organizing a case has not been identified before, the regulator notes.
The Central Bank also reported that an investigation into this case of manipulation was initiated at the beginning of this year. “The basis was requests from several major professional participants about signs of coordinated activities of a number of their clients. This is a classic pump and dump manipulation scheme (a classic stock fraud scheme, where insiders promote a certain stock through rumors in the hope of making a quick profit. - RBC),” the Central Bank emphasized.

The Central Bank did not specify what damage from the manipulations could have been caused to private investors who bought shares of Live Office. At the same time, the regulator clarified that if information appears about damage caused to individuals, it will be sent to law enforcement agencies to consider initiating a criminal case.

The Eltra company did not receive an official notification from the Central Bank about the cancellation of the professional participant’s license, the company’s press service reported to RBC. “All official information will be provided after receiving an official notification from the Central Bank of the Russian Federation,” Eltra notes. “Now the company’s experts are preparing documents to challenge the Central Bank’s decision to revoke the license [if the information is confirmed].”

Technical analysis of stocks live office. The Central Bank uncovered a large-scale scheme to lure investors to the stock exchange

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Which stocks should NOT be bought in 2017-2018 (Never).

Remember the main thing - never listen to anyone and always do a critical analysis of the company before buying its shares.