Eden Again - Eden Research (EDE)
17/5/2010
(119264)
Eden Again
Trading in Eden Research resumed this morning (Monday) at 15p to 18p, and by the time of writing had risen to 17p to 20p – just about the price when the shares were suspended four weeks ago from the dismal Plus market.
A brief and customarily opaque statement from the company suggested that the suspension related to resolving issues over working capital. These have been satisfactorily resolved, the results for 2009 are due on May 28, and the directors remain confident about prospects. There has been no share issue, no new round of fund-raising.
Stephen O’Brien has had to resign as a non-executive director following his appointment as Minister for International Development.
That’s all right, then. Back to normal after a few nail-biting weeks for shareholders – but what changes? If you are not prepared to nibble a few nails in the course of waiting for Eden to break through to becoming a proper business – with great potential – you should not be holding the shares. This is high-risk stuff, bound to deliver a few anxious moments along the way, if it makes it.
That, though, really is not good enough. It is deplorable that the directors have not been able to deliver a clearer account of what has happened – and especially so since despite the usual efforts of the same old suspects to upset the business, there is the prospect of some really rather good news.
There is the possibility of a deal which would bring in a partner operating in an area which would fit naturally with Eden’s current business. Along the way, this has meant Eden has been back to those who have supported the company with loans for many years, and their continuing support has been confirmed. No deal has been done, and it is possible that no deal will be done, but it appears that both parties are keen.
Whether this means a move to another market at some stage remains unclear. Eden’s financial position has long been unconventional, depending on financial support of those who believe in the business. That cannot make negotiations with potential partners easy, and leaves the company open to attack. The enemies have been around for a very long time, and have renewed their assault in recent months as it became more apparent that the company was making strong progress.
Sadly, it is all too easy for clowns and conmen to drag old skeletons out of the cupboard and parade them before others who do not know the full history, especially when some Eden directors do not appear to have been fully briefed on handling the affairs of a public company. When advisers and others are being bombarded with lies and half-truths, they tend to become overly defensive. As a result, they opt to restrict company announcements as tightly as possible, leaving investors in the dark.
The board badly needs strengthening. Intriguing that the name and phone number of a financial public relations company, staffed by experienced people, now appears at the bottom of company announcements. Almost inevitably, they were out to lunch when I called.
Eden has always been a share to hold with money you could afford to lose. It remains that way, and it would be foolish to sell now that Eden-inspired products are coming close to market. Nothing guarantees their success, but they offer startling gains over established rivals, and big names are in the background, taking a look. If Eden should succeed, the rewards could be substantial.
I have a holding in Eden Research.
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