Positive to "death loan": – I think it's a favorable financing for the company

The shares of the three listed companies Element, Induct and Lavo.tv fell sharply on the stock market this year. Much of the cause may be related to "spiraling death loans" that all companies have taken out with the British management company Alpha Blue Ocean (ABO).

The Element cryptography company has increased significantly in the stock market when it announced last year an investment in cryptocurrency, but since the beginning of March it has dropped 70% at a price of 1,8 crowns. The share of the computer company Induct and the company of applications of flow Lavo.tv is down by 30% and 50% respectively this year.

The so-called "spiral loan of death" granted to Element is a convertible loan of half a billion dollars. The loan is divided into ten parts, each representing 50 million NOK, and gives ABO the right to convert the loan into shares on the basis of the average price of the last ten days. This means that the lower the price, the more the lender receives shares with each conversion. And the existing shareholders are exploited.

"Everyone knew the risk"

The main shareholder of Elements, Rikard Storvestre, does not blame the company to have reached an agreement with ABO. He holds shares in the cryptogenic company for 18 million NOK.

"I think it's a favorable financing for the company.The shareholders bleed in the form of dilution, but in a regular issue, they would also have been diluted.The shares may be a little over sold, but everyone was aware of the risk, says Storvest.

"Of course, there would be pressure on the stock price.There is nothing new and no one should be surprised," he adds.

"They practiced their profession"

Storvestre says that Element, which is intended to invest in secure cryptographic currencies in the company's raw materials, is debt free and has received 150 million NOK when the first three rounds are completed. It also shows that Element is one of the companies that have trouble getting regular bank financing.

"Then we hope that the money that enters can generate new values.The idea is really very good and for many companies that do not benefit from regular bank funding, this is favorable, says Storvestre.

The company Induct and the continuous application company Lavo.tv recently went to Alpha Blue Ocean. In Wednesday's issue of Finansavisen, it is said that Lavo.tv will investigate whether Alpha Blue Ocean has adjusted the company's price drop.

– That's "bullshit". Alpha Blue practiced his craft but did not break any rules, Storvestre said.

He adds that the Element shares were traded at 1.4 crowns per share, a significant drop from the price of about six crowns at the time of the conclusion of the loan facility.

"That's what Alpha Blue Ocean has the right to do, but of course, it would have been better to earn 3-4 dollars," says Storvestre.

"Be aware of the risk"

Haakon Sæter, the investor of Fredrikstad, fourth investor, is also not dissatisfied with the fact that the company has entered into such a loan agreement with Alpha Blue.

"It seems very naïve not to be happy that the course is falling in. We should have known what agreement was signed with the lender and such an agreement might well lead to sales pressure on the share price" said Sæter.

– As a shareholder, you must also know and understand the price risk that entails because it is important. And the case was well lit in Element at least. When there are always new issues with a ten percent discount and the shares are sold right after that, then it must become a spiral, says Sæter.

He points out that there is also a "good solution" for companies that can not get financing otherwise.

Induct believes the ABO fund has broken the law

It was Friday that Induct, a publicly traded company, informed the market that it had reason to believe that a fund through Alpha Blue Ocean had broken the law by converting loans into shares in accordance with the contract. loan signed in late October. The company requested information from the Fund, but it declined and reserved the right to claim compensation for the Fund's opinion regarding the Intron.

In June, Lavvo went public with an account borrowed in London. In the British capital, entrepreneur Tom Roger Sokki and former general manager Bernhard Steen were presented to Alpha Blue Ocean (ABO). As a result, Lavo received a convertible executive loan divided into tranches.

"Our impression was that this company had a long-term investment perspective," Gründer Sokki said.

Pierre Vannineuse, founder and CEO of Alpha Blue Ocean, is pleased to be able to contribute to the financing of the first phase of the company.

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