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TheAnswerIsNo broker magic man now predict £14,10 in December
That's not what the analysts were told at the presentation on the day (I knew someone there), but the RNS trumps that, thanks Carpy.
They were told AML were on the hook for cash up until 62p.
(It was an issue then as the share price then was in the low 50s from memory)
I'm pretty sure the SP wouldn't dip much below that anyway, unless they lose the court case.
Cheers Paul for the validating support. :-))
@carpymick – Your interpretation of the deal also matches the wording of the RNS on 27/10/20:
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Extract from ‘Financial terms of the Strategic Cooperation Agreement’:
“In consideration for the technology and critical intellectual property that Mercedes-Benz AG will make available to Aston Martin, Aston Martin proposes to issue new ordinary shares to Mercedes-Benz AG (the "Consideration Shares"), with a maximum value of up to approximately £286 million (at a price equivalent to approximately 62.317p per new ordinary share, being the "Mercedes-Benz AG Entry Price")
No later than by early 2022, Aston Martin expects to issue further Consideration Shares to Mercedes-Benz AG, reflecting the value of the second technology basket received at that time, which will be mainly focused on battery electric vehicle technology. Aston Martin may continue to receive access to additional technology throughout 2022, in return for issuing additional Consideration Shares to Mercedes-Benz AG, until the total value of all Consideration Shares issued reaches £286 million.
If the ordinary share trading price on the date any further Consideration Shares (beyond the first issue) are issued is below the Mercedes-Benz AG Entry Price, Aston Martin will be required to compensate Mercedes-Benz AG for the difference between the two prices by making a further cash payment (on a per share basis).”
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Compensating for the difference is definitely not providing 100% cash instead of shares.
Cheers, Paul. :)
C26, it's cash payable for the difference between £12.80 and the SP. So if the SP has dropped to 12.00, they will receive the shares they are owed, plus 80p for each share. Here Is Stroll's answer to a question from Citi during the 2020 Q3 results:
"Angus (Citi)...I believe you can talk about the mercedes agreement and how we should think about it. Is the correct way to think about it as a kind of equity finance CAPEX? And perhaps you could specifically discuss what happens if the share price continues to trade below the entry price and how you calculate the value of the technology that is being given and any further cash top-up that'd be paid? Thank you
Lawrence Stroll: I'll start with the last one. We think and know the technology given is of a value that if we had sourced on our own would have been considerably greater expense. The second question was Yes, if the share price is below 60 - I believe it is c.62p - that we would have to pay the difference between 62p and anything below that. We are obviosly quite confident we will not see the share price, but instead well above the 62p mark. So, we're quite confident that's a none issue for us."
Carpy, you are wrong, it's cash payable for anything under £12.80.
I think the reason for the drop is most of the small holders have lost interest and sold up. They expected a quick win which they got to some extent if they got in and out at the right time . However, the share could only gain so much without the company actually making profits, and when it platead people started to jump ship and the share has just drifted down. I've always said people need to be patient, the real gains will come after all the new cars have been launched and the debt eventually refinanced. It's still a long bumpy road ahead and we're definitely on a bumpy stretch right now. My view is obviously different to yours...I still believe the company is on track and we will be rewarded in the future.
So, after all that you have no idea how he will support the share price. Me neither.
I am now thinking the SP was kept above £19 for the middle east investors to get out. As soon as those 6 /7 months of selling were up in September, the SP imploded.
C26, when the SP hovered around 50p for weeks on end there was a lot of suspicion that Stroll was holding the SP down for some reason. One of the posters emailed AML and asked if this was the case and why. The reply which came from Charlotte was that the opposite was the case...Stroll was supporting the SP which was under attack from shorters. You remember this, but I am explaining it for the benefit of others who may not have been on the BB at that time. The reason he supported the SP was because he was obviously in negotiations with Mercedes at the time as the agreement was announced shortly after. The reason he will support the share again if we get near to £12.80, is so that we don't have to pay mercedes. Also, 12 months ago he said the SP would be well above that amount when the 2nd traunch of shares go to mercedes...he won't want to be proved wrong! I dont know his methods for supporting the price, maybe he just gets a few of his rich mates to make some large purchases...who knows. Why didnt he support at 17/16/15....why should he? At this stage he probably wouldnt be that bothered about the SP if it werent for the mercedes deal. He will become concerned as we get close to £12.80. This is all IMO of course.
Carpy, how is Stroll going to control the share price?
And why didn't he support it at £17/16/15?
Let us know how you get on with your tarot card reading.
AML was down 33% before yesterday's market fall.
Exactly Carpy, whole market is down. Anyone saying this is an aml problem is just trying to cause trouble. Great buying opportunity to build a position. Long and strong
If the share drops below £12.80 (which I think is unlikely) we do NOT have to pay mercedes £143m. We would have to pay the difference between the share price and £12.80 for each share going to mercedes, which would be a small percentage of £143m. I am sure it wont come to this. We all know the cause of today's drop and the markets will probably bounce next week. If shorters persist in pushing the SP down, I expect Stroll will step in and support the SP as he did for a long time when the SP wás 50p...he will not want the share dropping to £12.80.
I thinks it times to buy now. I think I said £14,25 in next February and that reached quickly!. Might be times to buy and then selling again in December before February lowest
AML owe Mercedes £143m for the remaining 10% as part of the tech deal.
If the SP falls below £12.80 they have to reimburse them with cash rather than shares.
As l said in September the stock would go south. The new variant of covid will drive the stock down further.
My personal view is money is to be made elsewhere. I see an oversupply of DBX on the used market according to a UK wide group. A client cannot sell her DBX for anything like a 40 percent loss. The Nottingham AML dealer who supplied it does not want it back.