The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.
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CPI need to find an extra 3 million shares to cover the guaranteed employee benefit allocations they announce today.
Somebody buys 3 million shares in a hurry this afternoon with little regard for short-term price (certainly not somebody looking for a quick return, or dealing in fractions of a %).
It could be completely unrelated, but seems like a huge co-incidence to me.
If the share drops back on Monday then I think we'll know for sure, but I guess we just keep an eye out for a shorter-related RNS or other positive news next week.
Broomtree - Baseless panic, more like. ROFL...
SmallMoves - I was just now reading your comment about taking 10m shares out of the Employee benefit fund. Good lord - where are you getting all this, pardon my language, shiite from? The employee benefit scheme shares is not a piggybank that CPI can dip into anytime to issue shares to management against options (and those that haven't vested yet).
I'll leave you chaps to let your imagination run as wild as it can !!! AFter all, it's the weekend.
Best fun I’ve had on an LSE board in a long time ‘Don’t panic’ 😂
SmallMoves - nope. All the awards today are all options that vest in 3 years. AH has conditions attached to his vesting, but the others don't. That's the only difference. No one is issuing any shares against these options right away!!!
Thanks Smallmoves
@Gocpi- isn’t the underpin element only attributable to AH’s shares?
Yep that's why I excluded AH's 6 million from the total, but the other directors don't have to meet any conditions from what I can see and theirs have been rubber stamped already.
Therefore it would make sense to buy enough shares to cover off everyone else now as the SP is close to all time lows, and they must expect it to rise significantly with AH on board. They already had 10 million shares put away, so another 3 million isn't a big deal for them really.
Chaps - first things first, these are not shares issued right now. These are RSAs (restricted share awards), the equivalent of RSUs (units) prevalent in the US markets. They vest in 3 years, i.e., they become shares in 3 years time.
And here's the brilliant kicker. the remuneration committe could scale back these awards if the underpin condition below isn't met. The key is that there is a dependency on positive shareholder return being achieved through the end of 2026. Please note that JL's awards never had any such dependencies and he was free to destroy shareholder value without any repercussions. Not so with AH.
As simpiles said, this current board is very different with a good focus on SH value, and AH isn't JL. Thank goodness.
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The underpin conditions attached to Mr Hernandez’s 2024 RSA include:
Underpin 1: Capita’s total shareholder return (“TSR”) over the three years ending 31 December 2026 to be positive; andUnderpin 2: the Remuneration Committee (the “Committee”) must be satisfied with the underlying performance of Capita over the vesting period and that there have been no environmental, social or governance issues resulting in material reputational damage.
The 10 mill figure came from their recent Total Voting Rights RNS:
https://www.lse.co.uk/rns/CPI/total-voting-rights-m6n2qtlyd7k6wvu.html
So capita themselves bought 3 m of shares? Where did you get the 10 m from?
CPI had 10 million shares in hand in their employee benefit trust, and the RNS mentions approx 19 million shares being issued today. However 6 million of those are for AH which aren't due for 3 years. So that would leave 13 million being needed to cover the RNS, which is a shortfall of approx 3 million shares and that's pretty much what we had this afternoon.
So that could mean all this was nothing more than an "expected" yearly buy for the directors. Back to the 13's Monday it is then... :-/
Buy the rumour
Agree with that Schlemiel . Is this something that happens every 3 years as I think they only vest if there is good performance
Maybe today was a bit the rumour event
trisor
not sure mate but the issuance of nil cost options to so many board members and in such volume may indicate potential corporate activity at some point
nil-cost options are a ****sss take imho
Does the RNS explain the action?
Grant of nil cost options...free lunch
NM
I put the trade extract from LSEG into Excel and did some filtering, and it all looks to ave kicked off at 16:07:36 and there were exactly 300 automated trades for a total of 3.15 million shares costing £445k spread over the following 23 minutes or so right up until close.
It could potentially be a shorter getting out at least some of their holding (0.5% is 8.5 million shares or so) having decided they'd better take the cash and run.
Although I'm also quite liking that theory of an RNS being submitted at 4pm that leaked. It only took 7 minutes for the message to get to some trader who then setup a quick buy job on his terminal.
Still a way to go until my break even of 17p, so fingers crossed for Monday!
Takeover bid?
Chaps what’s happened here. This was around 13.50 last time I looked. Seems like a load of buys!
Well if schlemiel is right then Mondays going to be like results day all over, the Gripfit will add and we'll tank!!!
Could it be related to the normal monthly share ownership purchases?
Don't ask me FFS !!!, I'm a layman to be honest, I know there's usually just the one but it was simply an observation of something I've not seen before
I'm pretty sure they had the same discussion on volume and RNS to come on the BT spike. There was no RNS and the price fell back. Just have to wait and see I guess.
JG is it related to the earlier auction?
@JG68
I think the 16:24 UT was as we span our of auction at 15.84p - that would possibly explain that trade and then the usual one at 16:35 too?