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I think primary bid costs maybe higher, I think they are 10% off hand from other companies deals, in regards to recent premium placing, I have used figures based on all been received, I think net is 800k with a 4% fee added (this is a friendly placing and a lot cheaper)
Either way, gut still says you can’t buy much in terms of income producing oil and gas asset for £10m let alone £1m or less
If you think ADME can pay in shares, this just further dilutes shareholders stake even more
InvestingGenius: "As for cash burn their costs have reduced massively down to just £849k and they will be profitable in 2020, which means every month that figure is getting less and less."
that makes no sense. adme do not have positive cash flow
at present, because the revenue they get from the oil lifts
just goes towards paying off debt at the project level. the
company has said that it hopes to become cash flow +ve
in H1 2020, i.e. once they've paid off their share of that debt.
(note, the company has **not** claimed it will be 'profitable'
then, just that they hope to be 'cash flow positive', different!)
but none of the above means that their 'admin costs' are
getting smaller, month by month - i.e. just because they are
paying off project level debt does *not* mean that they are
paying any less each month on stuff like the huge BoD wages,
keeping the lights on, getting paperclips replaced,etc etc.
secondly, the half-year report stated that admin
expenses were reduced to £511,000 over the
six month period reported on. that is about
£85K per month cash burn, month on month.
(curiously, IG mentions a figure instead of £849K ...)
third issue in IG's post re cash position,
IG figures don't take into account that the
cash raised from placings etc was reported
as gross figures, not *net* proceeds. so in
working out what cash ADME actually got,
it is necessary to deduct from the gross sum
the likely costs of organising the placements.
(it looks like dan and i have some similar-ish
views regarding the cash position, but we differ in
that dan thinks placing costs are lower than i do.
dan's figures also look slightly different as he
is forecasting that they will bring in the rest of
the conditional placing money. i do accept that
is possible, but my figures were simply about the
money already collected and cash position now,
rather than forecasting out to end of december.)
it is odd that some optimistic posters seem to think
that ADME's cash position *is* relevant when they post
their own views that the company has more than £1mill,
but then think cash position isn't that relevant when
the reality of a lower cash position is pointed out.
to be sure, if the CEO manages to pay a small sum to
buy a magic money tree asset that immediately brings
in lots of positive cash flow, for only a small outlay, then
the company's cash position will indeed look lots better.
... i'm not that convinced that is what is going to happen.
Cash reserves - few facts
End of June cash reserves - £84,000
Admin Expenses have been reduced to £511k for 6 Months (£85k per month cash burn)
lets forecast to December 2019
£84k cash at start of period
£500k Cash Burn for July to December
£500k raised (before expenses say £25k) so £475k
£832k to be raised (before expenses say £32k) so £800k
So probably £800k by end of subscription without having to come for more funds
IG it looks as though Spikey does care here but for all the wrong reasons lol. News can't be far away now shouldn't take much for this to get back to the 7p level prior to positive news.
ADME raised £500k in August at 16p. And then a further £832k in September, of which ADME are still waiting for the final £279k which i'm told will arrive next week.
As for cash burn their costs have reduced massively down to just £849k and they will be profitable in 2020, which means every month that figure is getting less and less.
So by my calculations they have circa £1m in the bank with another £279k coming in next week hopefully. They had about £100k cash in the bank before the August raise and cash burn is very low now.
But who really cares. They clearly have plenty cash and we are all awaiting to find out what they are going to be doing with it. Anyone with half a brain can see that market mechanics are a screaming buy in the 5p range. All thje money is in much higher
"We know ADME have over £m cash in bank"
nope, more like £650K cash currently imv,
as per previous post using RNS figures re
cash balance end june & ongoing cash burn.
Which is exactly what they are planning on doing.
We know ADME have over £m cash in bank and raised the money at 7p to get another deal done to add to their AJE stake. Expecting something soon and then expecting volume and liquidity to pick up quickly here. There are no sellers down here, once buyers turn up on news its going to get fun real quick.
market making is a risk business. market makers don't win all the
time, they just need to win 60%+ of their attempted positions, to
make it worthwhile. if they lose 40, win 60, over & over, in decent
volume, that's a perfectly good business. one snag peel face at
present is the minimal liquidity, when peel hold a large stake that
is known to the public. there isn't enough active volume in the
market currently for peel to be able to unwind that position even
if they do want to, without cratering the share price. just imagine
what would happen if they managed to sell down a few % of their
shareholding over a couple of days, but then had to RNS change
in their holding while still holding >10% of the company. oops.
so although they can anchor the bid and ask fairly effectively
with little newsflow & low volume, they can't drum up trading
volume out of nowhere. so if they are wanting to unwind the
position, they have to wait until something stirs the market
into life and raises the volumes, e.g. some RNSs about 'deals'.
You may be right. But I think, generally, market makers are good enough at their jobs not to get left holding a baby. If PIs are selling, they'll start picking them up, but quickly lower the bid and the ask until they find the level where they can find buyers for the shares they're picking up. Even shares that have crashed drastically don't seem to leave market makers holding shares they can't offload.
Could you give another example of a market maker who ends up holding a position above 15% for 6 or more weeks at a stretch?
The reason they are maintaining that holding is due to the lack of PI involvement - they are controlling the price but they can't make people buy or sell, their position is mirrored by the confidence of PI's, their increased shareholding is really a testament that PI's are generally selling
Anyway, lets see what happens with the Investment / rest of placing
You mentioned Tower Resources on here with Peel and see what has happened their is shocking (23p to 0.45p) since Peel Hunt became an 'investor' - i have never looked at TRP until you mentioned it
Yes, Dan, they're a market maker. This is how market makers make a profit.
I'm not disputing that they are doing this. What I am claiming is that this is not all that they are doing.
Again: They're doing two things at once, but because we only get TR1s for their total position it's easy to confuse them.
1. They're maintaining a holding of about 19%.
2. They're one of the market makers for ADME, which means they (like others) buy and sell to keep the market liquid.
Role 2 means that their total position fluctuates in the range 18.5% to 19.5%, and every time they cross the threshold of 19% they have to notify. But 1 is steady as a rock, and their target holding seems to have been a steady 19% since HH sold.
You're simply pointing out that they are doing the second of those things, and that they're doing it well enough to be profitable. But nobody is disputing that. My point is that they are also doing "Role 1". By explaining how market making works, you haven't disproved the other side of this.
In regards to Peel - look at todays minimal trading
on the basis that PEEL control the book here and are the MM most likely to do the trades
on them 11 Trades, Peel have increased their holding here by £66,337 but also made a cash positive return of £2,731
not bad for a small day - £2,731 richer and have more shares than at start of day
now think what happened on heavy trading days and you can understand how much they really made and why it is likely there average is a lot lower than anyone here thinks
a small amount of trades that could of happened.
The volume of trades around 4p were small, go back and check. it was discussed at the time.
when people sold at 4p, they sold to Peel at 4p
if someone got in at 4.5p, they bought them shares from Peel
The share price only touched 4p momentarily on the day the Sheikh's sell was announced; nobody loaded up at those levels - just one or two lucky folk picking up a few.
I am utterly unpersuaded that they're trying to offload the Sheikh's shares for a profit. If so, why did they bought more? And while they act as market maker, their percentage keeps going up and down, but they've held at 19% +/- for over a month now. If they're trying to reduce their holding to zero, they're not doing very well at it. They haven't even gone down 1% yet, after a whole month. What's more, the profits they made on the day the sheikh sold (selling the shares they bought at 10p for 12-15p) would more than cover the losses on his shares they still held. If they were just market making, they'd have taken a 3p per share hit and sold the rest for 7p the following day, still ending up in net profit.
As I've said a few times, they seem to fluctuate by a little under 1% as they operate as MM, but their baseline holding is holding very steady at 19%.
And you have to remember the other thing I've mentioned before: They've been the single largest shareholder at Tower Resources for some time now, even being praised by management as being a co-operative significant shareholder.
They don't just act as a market maker looking for the quickest day profit they can. They are doing that here, but they're doing something else as well. None of us knows what they're doing, but the idea that they're stuck with HH's shares and finding they can't get rid of them on the margins they want doesn't fit the facts.
Peel wouldn't of taken place in in Placing - i'm certain of that
Average will be a lot lower than 8p - they purchased c13m shares at 10p but the day after they were down to under 8m (5m shares they sold from 12p to 16p) which would reduce their average.
I'm also pretty certain, that they were loading up at 4p and under the day news arrived about the Sheikh and the SP crashed before settling at c7p - they have then traded on margins - when SP has gone down, there holdings increase, when SP goes up, there holdings decrease
its likely that if someone offered them 6p for all shares you would quickly get a zero holdings notification
Could it just be someone waiting for the chance to sell, but looking at Google, so mistaking a recent buy as an increase in the share price and so a chance to sell (unaware that they'd have got the same bid 10 minutes earlier)?
I think some games are being played here to try and keep the SP down - several times over today and yesterday some large buy trades have gone through followed within a minute or so by a sell.
For example today a 133k buy went through just before at 12.54 with there having been no trades since 10.12 then within 30 secs a small sell goes through. Very odd....
Average is probably close to 8p or so. They took most at 10p from the Sheikh. A few in 7p placing and a few in open market below that.
They are getting ready to send this up fast towards 10p so they can derisk and take some profit. Market makers rarely lose. Know the game.
Easy buy here. Patiently wait for the fireworks to come.