The leader of the pack in the short attack on Recon Africa is Viceroy Research. They have been very public about it, putting out PRs attacking Recon ($RECAF), but I think they are doing even more behind the scenes. They may be funding fake enviro lawsuits, placing stories in news sites and maybe even corrupting science journals with misinformation.
Examples of Hit Pieces on Recon:
A huge hit piece was put out this week by the Globe and Mail https://www.theglobeandmail.com/business/article-rcmp-investigating-canadian-oil-company-reconafrica-after-complaints/ And that was based to a large part a science journal article by Kosters, and Kosters used Viceroy as a source in that article pretending they were an objective source and censoring the fact they are a convicted and fined Short Fund that spread lies about another African based company to profit from a panic AND that they have a big short position in RECAF stock.
As a rusty geologist I am appalled that the editors of that journal did not catch what I did in 2 minutes of research on Viceroy and Kosters' article: https://earthsciencesociety.com/2021/08/05/canadian-company-recon_africa-drills-for-oil-in-the-okavango-delta/ Shame on them and her.
Kosters ends her article with " The world is in a climate crisis and must transition to non-carbon energy as fast as possible. We all know that we can’t do that overnight. Producing existing plays during this “bridge period” is legit, but developing new plays in pristine parts of the world is disingenuous and inexcusable. "
So she is saying her motivation is a fear of "climate crisis and we must transition to non-carbon energy as fast as possible". So her fear is Recon finding oil. BUT the first part of the article is all about her claiming there is no deep sedimentary basin, so that there is no possibility of oil, which means RECAF cannot cause climate problems, which is her main concern??????????????
She says before that "At this point in time (late November 2021) "we are sure a deep Kavango Basin doesn’t exist." and says because of that, there is no oil. She cannot have it both ways. If there is no oil there, Recon will pump a bunch of cash into a very poor country, and everyone wins except Recon and its investors.
Kosters is claiming a massive conspiracy by RECAF to fool the entire oil industry, with many famous outside experts as co-conspirators. That RECAF goes before big geologist groups and does Q&A fooling them all, no one notices there is no sedimentary basin there that could have oil looking at the seismic. Very hard to believe, plus she contradicts herself saying developing a new oil play will cause huge climate dangers, yet there is no oil there, so there is no danger. She has zero cred with me.
She cites Viceroy as if it were an unbiased source. Withholding the fact it is a short hedge fund convicted of sleazy stock manipulation and has zero geology expertise. Here is how she puts it: "Conclusion Viceroy Research (2021) blasted ReconAfrica’s enterprise for deceiving (potential) investors and from not being clear about whether they will need to use fracking. This claim is also made in the lawsuit that was filed against the company."
So, Who Is Viceroy Research?
The Financial Sector Conduct Authority (FSCA) has imposed an administrative penalty of R50 million on Viceroy Research – a short-seller that sent South Africa’s markets into a spin in 2018 by targeting Capitec bank in its reports. The group, which dubs itself an “investigative financial research firm”, is a partnership between Aiden Lau, Fraser John Perring and Gabriel Bernarde. It is known for publishing reports and investigations into companies – which they categorise as opinions and personal views, but contain damning allegations and inflammatory positions.
Viceroy gained some prominence and credibility through its reports on Steinhoff, in which the group appeared to have ‘called it’ on the multinational around the time of its infamous crash at the end of 2017. In 2018, the firm took aim at Capitec, alleging that the South African banking group was operating as a loan shark, warning that it was “heading for insolvency”. The group alleged that Captiec was making unsecured loans mainly to low and middle-income households and concealing losses by refinancing loans that customers were unable to repay. At the time, it labelled Capitec “uninvestable” and called for the Reserve Bank to step in and put the bank under curatorship.
The reports caused a crash in Capitec’s share price – tanking 23% on the day it was published – and it would take weeks of reassurances and the backing of National Treasury and the South African Reserve Bank to calm market jitters around the claims. Viceroy did not let up on its attack on Capitec, however, and published follow-up reports and responses through to July 2018, keeping the finance group’s share price under pressure. It also later took aim at other listed companies in South Africa, such as NEPI Rockcastle. More than four years later, the FSCA has now taken action against Viceroy for the chaos it caused.
https://businesstech.co.za/news/finance/519514/capitec-short-seller-viceroy-fined-r50-million/
Which also pointed out on Capitec what we are seeing today on Recon:
Explaining the large penalty, the FSCA said it took several factors into account. Specifically:
The fact that Viceroy made a concerted effort to publish the statements about Capitec as widely as possible, knowing that Capitec is a systemically important financial institution in South Africa and that these statements had the potential to trigger a run on the bank.
Capitec suffered significant losses and damages as a result of their reports – with its share price crashing 23.12%. Meanwhile, Viceroy, being a short-seller, gained financially from the decline in the share price.
Kosters and the Globe and Mail left this crucial information out. Why? Are they both on the payroll of Viceroy? They act that way.
There remains a big question, just because Viceroy is a convicted sleazy Short Fund that spread misinformation about SA bank Capitec to crash the stock, that does not mean that Capitec was not a bad investment. Viceroy said Capitec were already bankrupt and had no chance of success 5 years ago. What has happened since?
Was Viceroy Right About Their Prior Target Capitec? No, It Is A Super Profitable Bank 5 Years Later
I just looked up Capitec; Revenue 31.39B Net Income 8.52B, wow that is a fabulously profitable bank 5 years after Viceroy said they were already bankrupt. https://www.msn.com/en-za/money/stockdetails/analysis/jse-cpi/fi-am3www
The stock has been going up for the last 3 years after the Viceroy phony attack on them wore off. This time with RECAF I hope it is not a fine, the Viceroy folks deserve to go to prison if this is another Capitec like deception as it appears to be.
Addition:
That business article mentions NEPI Rockcastle, a company have never heard of, but a target of Viceroy too. How are they doing since?
Fitch RATING REPORT NEPI Rockcastle plc
Tue 07 Dec, 2021 - 8:36 AM ET
The Positive Outlook of NEPI Rockcastle plc’s Issuer Default Rating (IDR) reflects the company’s long record of a conservative financial profile and Fitch Rating’s expectation that the new management will commit to maintain this. NEPI’s net debt/EBITDA has remained below our 7.0x upgrade rating sensitivity at 6.1x (end-2020) and interest coverage has remained strong at 6.0x. The Positive Outlook also reflects NEPI’s EUR5.6 billion income-producing portfolio of regionally dominant shopping centres
So, of the four companies that Viceroy has attacked three have done well since and none of the three had the problems that Viceroy claimed. So, it appears they are very inept on top of being sleazy. It is not hard to find stocks that are overpriced. I have a list of short prospects, just looked at the Bs and Cs (there were not any As) on it and see BITO, BYND, CHWY, COIN and CRWD. 100% have crashed more than the market has in the last year. It is reassuring to see all this evidence that Viceroy has been so wrong before and sleazy. It helps a buyer of RECAF stock today because it has depressed the stock price just as their phony attack on Capitec did. But it has hurt existing RECAF investors. Maybe a lawyer will want to do a class action lawsuit on Viceroy?
