Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
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More here
https://www.investorschronicle.co.uk/ideas/2023/12/20/there-is-a-golden-opportunity-to-fix-investment-trust-discounts/
They are trying to get stuff resolved in Parliament about it.
At the risk of giving egg sucking lessons, while long term one might expect the share price to correlate with the underlying value of the assets, the share price in the short term merely reflects what buyers and sellers will pay or accept, respectively, for the shares. Any “value” that was attributed to them in 2016 is, therefore, irrelevant. When more people expect to make money from the shares than expect not to, the price will rise. Individual investors will have their own reasons for deciding whether or not the risk/reward balance is favourable but at the moment the falling share price tells us that the majority think it is not. Anyone who disagrees will either need to sit tight, like I intend to do, or cash out and move on.
Well that is an excellent explanation as to why we seem to illogically underperform of late. Regulatory screw ups (change) are normally at the root of long term value decreases such as with UK banks post crisis. Barclays has never recovered it’s pre crisis SP.
How long has FSA been applying this, how vigorously? Why did this not prevent our run up to 11.82 in 2021?
IN any case relaxing FSA on this wil cause a boost. Can’t see Labour against either. Current government complete mess. .
Fund managers have to report the detailed costs of their fees charged to clients and there is great pressure to keep these low.
Investment Trusts are getting treated under the FCA rules as if they were unit trusts charging fees rather than listed plcs whose fees are reported and dealt with as they would be by any other public company.
This probably explains why Border Pensions were selling recently.
Some info here on part of the problem why fund managers aren't buying.
https://pensionsandsavings.com/time-for-ministers-to-intervene-on-investment-trusts-as-fca-has-failed-to-achieve-change/
I don't think any if our core portfolio is on our books for more than 2/3rds of any last round valuation done in years 2021, 2022 when there was a modest surge.
i just don't get why our sp is below the 2016 float price back in 2016 in spite a a much larger more valuable portfolio per share. either im missing something or this is a massive unrealised value.
Reddit Prices I.P.O. at $34 a Share, in a Positive Sign for Tech
The social media company raised $748 million in the offering. Its shares begin trading on the New York Stock Exchange on Thursday.
If we ignore the merits of newspapers, perhaps if we look at interest rates from the perspective of trying to find a consensus that benefits the banking sector, borrowers domestic and commercial and taxation for whatever shambolic outfit is operating the agenda for the UK, then surely that is the "sweet spot" come rain or shine and it needs very little deviation except for specific events.
I know this sounds utopian, but I'm pretty sure that base rates of 4% would be in the best interests of all. Not too high to cause recession, not too low for inflation to be worrysome and certainly about right so that businesses and people are not bankrupted from high debt service cost.
The only sensible paper for market news remains the FT.
Telegraph will get even worse if Paul Marshall gets control of it.
He used his ownership of GB News to attack NatWest over Farage's "debanking" while his other firm Marshall Wace has a large short position against the bank.
This was apparently completely normal
Alas, sadly the telegraph has a lot of market news that the guardian does not carry. Can’t stand the columnists who are clearly paid by the owners to say the most ridiculous things about Brexit benefits, etc. but You can’t have it all. The paper will probably die off alongside it’s elderly readership. Even Liz Truss is lionized in the Telegraph -victim of the blob and not markets and her own stupidity it seems.
ANyhow for my money I think the new normal for interest rates is much lower than the 1945 2007 period due to basic demographics and trends. This blip up based on external shocks will be short lived and a footnote. War, rearmament and uncoupling of global trade tends to be inflationary but is not in total enough to counter trends on prices and thus interest rates . A real trade war with China would be inflationary but we are not going to get that. Just a few Trump induced skirmishes.
USA can’t wean itself off Chinese goods any time soon without a major drop in living standards. China in many ways can weather a trade war better than USA. They can pivot exports to BRICs, Russia and their own interior and they can shut down a large amount of the 180bn US imports (which excludes services and banking). Already happening. Will be a lot of angry Senators if anything sudden.
The Telegraph is a paper I no longer read, steph. I have a feeling that interest rates will fall in US in June, though with a glimmer of a tiny cut in May. Mr Biden spoke in Las Vegas yesterday and it is clear (to me) that he is in favour of more manufacturing in USA and more exports from USA. A falling dollar will help exports.
The rns today from the Irish sovereign wealth fund indicates the exact % dilution we will suffer due to fund raising. Of course the money injected adds to NAV but as it was injected at 2.75 and nav/share was 770 it will not be fully compensated.
So dilution is 7.8% mitigated by a cash injection that increases NAV of 2.75/7.40or about 5% net dilution.
So on total net assets of about 1.2bn we will need around 60 million in NAV upgrades to break even against half half year. Doable but unknowable. 50% sales growth should result in upgrades of much of portfolio but they have not done this so far. depends on comparables I guess. My impression is comparables in multiples of sales/valuation ratios have not declined so we might be in for a nice upside surprise. Market certainly does not think so so any good news (even year end NAv/share at 6.60 (treading water) will be welcome.
“If you want an idea of how the current fiscal and asset bubble in the US might end, pay close attention to Bernard Connolly, esteemed consigliere to hedge funds and central bankers across the world for the last quarter century.
It will not end in a soft landing – a “chimaera” – and will certainly not end in another leg of accelerating economic growth. Nor will it end in soggy stagflation.
“The invidious choice facing the Federal Reserve, he warns, is either to allow a deep economic slump to unfold, or slash rates to the bone before inflation has fallen back to target. The latter course will send the dollar into free fall and destabilise the world’s dollarised financial system, an outcome already being sniffed out by the reawakening gold market.”
Kind of my view. We are in for a renewed very low interest rate environment that will hugely benefit the GROW asset class. Too much capital chasing limited opportunities. Of course the upcoming companies of the future will be beneficiaries.
Go to source document, its public. Then you dont have to believe some random person who scribbles.
Investments over the last 18 months are also likely to have been done at reduced valuations so will have picked up some bargains along the way.
Https://finance.yahoo.com/news/reddit-ipo-key-things-know-090000743.html
Where the portfolio has frothy valuations there are others like Iceye that haven't been adjusted up as no recent funding rounds.
I read the S1; 159.2M shares outstanding after IPO with guide price $31-34 is $5.5bn
The Reddit IPO is priced at 6.5bn.
Anyway Revolut is more like Stripe and neither are in a rush to IPO at a reduced valuation.
Well graphcore was on our books for 113m year end 2022, 108m year end 2021 and 86m year end 2020.
March 2020 annual report was based on a Feb 2020 150m fund raising round valuing graphcore at usd $1.95bn . So 5%
5% ownership of 500m (rumored sale price) is 25m. Modestly above the 22m on our books for.
So in spite of troubles Graphcore should not be a drag this time round. Our current September 2023 estimated Graphcore NAV/share sufficiently discounted from last round heights. I do hope the interest of more than one buyer stretches the price a bit. No news though. Does show management has been proactive in writing down value well before a down round occurs. Good on them. I think our circa 750/nav/share solid enough and no need for2/3rds discount. Should be only 1/3rd or 5 quid sp.
Clearly market thinks I’m wrong. Good luck all.
Weak sterling, strong dollar, plus there are lots of stupid single entities out there, but the market by definition is not stupid.. Another datapoint, the Reddit IPO. Coming this week at valuation of about $5 -$5.5bn. Their last funding round in 2021 was a valuation of $10bn. The magic 50% discount AGAIN and it doesnt get more current than that. In 2021 pre Covid, the private market was valuing things at twice the level the public market wants to pay and you are seeing that play out in Molten and they typically play in cos that are much smaller than Reddit so justifying a 60% discount.
If the market is the world's best fundamental analyst why are so many UK companies getting swooped up at large premiums to their SPs?
The value they were holding Perkbox at sounded fairly accurate.
The Telegraph article about Triple Point referenced Molten's discount as 54% last year.
https://www.telegraph.co.uk/business/2024/03/08/revolut-investor-slashes-fintech-valuation-5bn/#:~:text=US%20tech%20investor%20TriplePoint%20Venture,%2433bn%20at%20its%20peak.
That is actually an error as MV cut it by 40%, not 54%. But saying that they never valued it internally at 33bn as they thought it was way too frothy.
I think when Revolut raised at 33bn MV actually realised part of their Revolut investment. I saw it on a presentation slide listing successful exits.
And they have recently bought some back as it's one of the holdings in the Seedcamp fund they recently bought.
Time and time again, market proves itself as worlds best fundamental analyst. If you take a contra view it needs to be based on hard numbers not wild speculation. Graphore is the next test of Moltens valuation policies if indeed it does find a buyer. Until then nobody has the hard data other than the accounts as at Sept last year.
You cant possibly know that Re Revolut. All we know is they have between 0.001% and 5% and its valued at £55M. You tell me their shareholding and then its easy to work out their valuation but unless you know their shareholding you are speculating. On Graphore, if Molten own the middle of the range they will have a write down of half their valuation. The fair question then is does this aggressive valuation policy apply more generally? thats what market thinks currently and so you 60% plus discount falls to 10-15%. Thats the issue Molten face, plain and simple. Market doesnt believe their current valuations and if they write off £12-13M further, market is proved right.
Revolut is held by Molten at a value based on market cap of about 16bn dollars.
The US VC Triple Point dropped it down on their books last week from 28bn to 23bn.
So MV is showing signs of prudent valuations.