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The negotiations with Seafox must have needed GMS to prove its ability to fund the acquisition of the fleet - Seafox wouldn't have sat down to those talks without substantial evidence of GMS being able to finance the purchase. We know very little about what the fleet comprised or its value. How were GMS going to fund that acquisition? However they were going to do so, we must take succour from the fact that someone was prepared to finance the deal - that being the case, it hardly suggests that we are looking at a Co whose debt leveraging is unmanageable. I am perplexed as to why it is taking so long for the new deal with the Banking Syndicate to be announced. We have to assume that they've been in talks since the pre-Christmas RNS that precipitated the plunge in the SP, at the latest. Four months+ down the road and they're still talking? Unlikely, IMHO. More likely, IMHO, is that the 'master plan' has been upset by Seafox sticking its awe in and snapping up ~14% of the Co on the cheap. The $64 question is what the 'master plan' was and how it's having to be modified to take account of Seafox's intervention. The negotiations with Seafox would have been the subject of an NDA and GMS has breached that simply by making mention of the fact that the negotiations took place BUT they would, doubtless, have felt on safe ground by reason of Seafox having acted in bad faith by taking a stake in the Co based on their, confidential, insider knowledge on the finances. No risk of litigation then but all a mystery to me and all other investors and likely to remain so since, I imagine, GMS has probably gone as far as it dare, in making disclosure, in order to counter Seafox's disruptive EGM proposals?
Well said GFD; Seafox presents itself as a success story in the niche market of Jack-Ups and subsequently bought 14% at 18pps on the back of that experience and additional knowledge gained from GMS's earlier approach. If they see great value at 18pps then the current share price is bargain basement!
Anyone thinking of investing should take a look at the PDF Presentation on the Co website - www.gmsuae.com - Investor Relations - Reports and Presentations - the second PDF doc under Preliminary Results for the Year Ended 31 December 2018. It makes for interesting reading. Simple fact of the matter is that Seafox would have ensured that the Co had access to the funds needed to buy their fleet, sooner than they sat down at the negotiating table with GMS. The deal fell through because Seafox sold one of the vessels forming a part of the fleet and then Seafox, as we all know, subsequently bought ~14% of GMS. Whatever GMS gave to Seafox, prior to the start of those negotiations, was sufficient to impel Seafox to buy a not insubstantial stake in GMS at up to 18pps. A little 'insider' information can go a long way :-)
If I were you I would check this out.
It will show you the debts are not spiralling up all out of control, the loss is reducing and the income is slowly returning to an industry wide LOW PAYING PERIOD! Try and read past just debt to see the bigger picture.
B in Black.
IIRC there is a shareholder meeting sometime in late May? 23rd or something.
Maybe there will be news before then or at that meeting? IDOK If that's a date they are aiming for? or if it will be sorted when the best deals can be agreed upon?
These might interest you.
I was just logged in to check US markets really.
Nothing has changed to alter my opinion (other than new appointees to the board have either got no money or should have bought some shares on such a low!) suffice to say that the SP is being held back by the events earlier this year, that stigmatism is still there IHMO.
there was an extra should! read it and it looked like I was saying something else!
My opinion (as a general rule of thumb) EBITDA times 7 to 10 is a good guide to the Market cap of a listed company. So say 50 million times 7 (350) to times 10 (500) as a rough guide to SP all things being equal (this is where I would expect it to be if the Day rates were back to normal and making profit).
There are a quite a few new appointments to the board, look on the website. I am sure Mo and the team with him will be working hard to renegotiate a better deal in the short to mid term for what can be considered an Industry Wide Poor paying period. Maybe there is a short term solution as GFD mentioned of an Islamic loan or maybe a better deal than 7% can be worked out? We shall have to wait and see.
I was just logged in to check US markets really.
Nothing has changed to alter my opinion (other than new appointees to the board should have either got no money or should have bought some shares on such a low!) suffice to say that the SP is being held back by the events earlier this year, that stigmatism is still there IHMO.
It will take some doing (actively spinning or otherwise) to change the "feel" for investors (especially those who DONT want to invest!).
There is such a long period of stability in the stock market anyway that a general correction is on some investors minds before we even talk about a specific stock.
The SP should be expected to be in the 30's and 40's IMHO.
As I said before that wont happen until the refinancing is sorted or the key figures have put money in (in terms of another round of buy ins) or there is some sort of news to change most peoples perspective away from the troubles earlier this year. Most people will mention debt before opportunity if you chat GMS.
The automated trades having an effect here at last (no real volume still) but nice to see a rise after the falls for a change.
Happening elsewhere similarly.
Will still be away, but saying hello to others here.
It makes a refreshing change Timmy but I daresay that, even saying that, it'll turn turtle tomorrow. There can only be two (categories of) peeps who want to drive the SP down. Traders and Seafox. Traders, born of sheer greed and Seafox hoping to make what might seem like an attractive offer of their, much lauded, 18pps. At 12pps that offer would seem like a 50% hike on the current SP which would be enough to get the ball rolling. The Co has to wake up, either way, and start behaving like a $800m enterprise else it'll find itself falling prey if not to Seafox, then some other predator. Maybe they need to get the aircon working in Dubai or take a long, cold, shower? This ain't Dallas, though! :-)
Only buys today. That's fine by me...
Thank you Pbody ....
Up early, have to pick up the Master Cutler from Derby.
SP and trades.
Look at right hand side of the trades to see either an A or an O for Automatic or Ordinary.
Its the Automated asks that are NOT their causing the problem. The automatic ask will drive the SP upward.
There are automated bids (causing a drop) but no ask (so no rise).
Hope that helps NED.
If you think GMS is odd with the SP. look at XAR on Friday/Monday.
loads of large sells Friday.....SP goes UP! ???? you tell me!
NOT Stacking up?
FFS. Its not been effing stacking up for ages!
I mean. 44million market cap and 50 million EBITDA! (and I think that ebitda value conservative!)
It is just bananas! How the flip someone hasn't just gone out and bought out GMS for a pittance!
One day the dust will settle, more people will look past the debt and go ahhhh!!!
Look back at the posts on here and you will see others just quote the SP is correct and its factoring in the debt!
You cannot argue with that kind of a: fear b:lack of comprehension c: down right common sense avoidance!
There will be an almighty re-rate and things will start to make sense.
For now sit back and think like me: WTF and just wish you could have bought more at 12.8pps!
Sometimes its not the average poster here that have to be convinced, when the BULL HERD finally get convinced then we might finally be looking at some numbers that make some sense. IHMO
Might not be able to post for a few days, will be checking in but doubt I will have time to type/dictate etc.
Hope that explains how I see it.
GWMO, XAR look interesting and hitting the bottom. TSTR,PDL too.
And nor do I, Ned. Were one to take the figures from the snapshot that I took earlier, the value of the Co would be reduced to $Nil on the disposal of only 10% of the shares in issue. Something's not stacking up here, at all.
... from the reduction in Capex alone should result in a bottom line profit in the current financial year if all else remains the same as last year - from the last Annual Report - "Capital expenditure The Group's capital expenditure during the year was US$ 21.4 million (2017: US$ 29.7 million) which included expenditure on a number of vessels to make contractually committed alterations and/or enhancements which resulted in operational efficiencies for clients. Capital expenditure (including contract specific vessel modifications) during the second half of the year was US$ 7.0 million. No significant capital expenditure is currently planned in 2019 and beyond". That Capex would have been at the expense of revenue earnings an increase in short-term borrowing, too, with a concomitant increase in interest charges at enhanced rates. That, expensive, borrowing (now standing at around $20m) will, hopefully, be wrapped up in the new deal for the long term financing of the Co. moving forward.
What I do not understand is who would be selling such small amounts? It feels someone is deliberately pushing the price down and testing genuine holders
Well, it's certainly true that recent, good, news has failed to impact the SP positively. Let's see what the new deal on the future long term financing of the Co does to the SP. There's no good reason for the SP to be as low as it is, even now. There's not been any massive sell-off by II's and Seafox mopped-up much of the stock (ca 14%) that was 'liberated' by the plunge following the pre-Christmas RNS. All that's happening, in reality, is that the SP is being whittled away by tedious, incessant, small Sells. That reflects more than badly on the way that the market operates than anything else.
I am not talking about here, I am talking about the Internet and investing in GMS in general.
Most information on the internet that is highlighted if you lookup GMS if from late last year and the beginning of this year. You have to actually dig deeper (quite a bit sometimes) if you want newer info.
My point is that period had quite a bit of "negative sentiment", if someone were to just go on that it could easily appear GMS is in quite a bit of trouble.
As I say it's not you me or NED we are talking about here, or probably most posting on this board, but looking on the internet, a new investor, looking to place his/her hard earned cash down, you could be forgiven for thinking twice or even thrice looking at it he news headlines.
There is SO much out there from that time period that it might take a bit of a seriously positive headline bombardment to reduce the vision of nightmares for risk averse investors that GMS is not making losses faster than it can pay!
As I said earlier, the 5 million loss could easily have been 8 million profit if the exchange rates weren't BREXITTED and the shipping movements were paid for on time.
The loan has come down from 460 million to 390 million.
You have to dig for this info. Its not reported in any headlines when you do a company search!
The 2 latest financial reports that I posted earlier today said 27pps and 33pps as a target.
They took 20 mins to find! Most the others were from much earlier in the year again slanting your perspective if your not fully aware.
I'm intrigued, pb, where do you read all of this 'negative sentiment' surrounding the Co? There's little, if any, being posted here except insidiously :-)
Thinking about it, after such a large share price drop where large holdings change swiftly, and to take the onus away from GMS its not uncommon for a firm to put out an RNS stating the total umber of shares and the fact that large holdings need to be reported. The likes of Debenhams or Interserve out these type of RNS out, along with some well run aim stocks btw. It lets the likes of you, me and NED know if Seafox is or isn't quietly gathering stocks.
As you said, at 13% of NAV could there be a serious consideration given to a takeover? With enough money it looks like it could be had for less than half what's been spent!
There is so much negative spin out there, I doubt you will get many responses other than "too much debt" or "in trouble" as regards the SP. The news of banking problems has meant the fact that debt has dropped from 460 million to 390 million has been overlooked! They made a 5 million loss. Not inconceivable this turns to a profit.
Whilst you were away there was a day where there were 3 million shares bought (over 10 times the sells) and the SP stayed the same. I think the SP drops are more to do with small trade matching. There is a lot of negative sentiment regards GMS (within the market) and that will take some serious positive spin to get investors to put in their hard earned cash. Most places I look haven't even reported the new chairman! It sounds stupid but you can't change the companies image to investors unless actively want too. That bad news has stuck, now its a case of HAVING to make a profit. How that is achieved as there are a number of possible options is going to be interesting.
There are de-rampers - CITY FINANTIAL holding 10 million shares and spilling them on the market being one!
They haven't even registered their share holdings as a major share holder and reductions if that is the case!
There is some real TOSH about.
More positive news this summer might help, but I think it will take profits and debt reduction. As debt is the first reply I seem to get when typing and in disagreement.
Over the years, I've been invested mostly in AIM stocks and I've grown thick-skinned to the vicissitudes of that market and its manipulation by Traders. It now seems that there is no real distinction between main and junior market stocks - the shares listed on both markets seem to be at the will and whim of traders and market makers and rarely reflect value. The SP here currently stands at around 13% of NAV and this simply beggars belief.
Ive noticed the same in other stocks im holding. You can have 20000 shares bought and the price will go up ever so slightly, then a sell of 500 comes through and the price will plummet severely. I dont have any reasoning though im afraid, I dont really understand the market makers systems.
... are having a wholly disproportionate effect on the SP. This has been the case for a while now. Take today's trades, for example. A current volume of 71k shares traded has reduced the SP by more than 2% yet that volume represents only 0.02% of the ~350m shares in issue. Mathematically, it makes no sense, whatsoever. Can someone please explain this in equation? I'm not talking about the Co, its trading position and its prospects (about all of which I remain confident), I'm talking about the simple mathematical disparity that I have described. Anyone?