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Sorry, I should have taken a moment to highlight this gem: '....Now it is small private investors fleeing a company that isn't to be taken seriously anyway and therefore it isn't a problem if they're throwing away $2m of their cash....' Honestly, there really should be some kind of digital sign attached to these message boards: 'You must be at least 'this' clever to post here' and there could be a picture of a chicken or maybe a rock, anything to at least insure that no one has to read something so patently moronic ever again (the most painful part of course is that you seem to think sharing some glittering insight). Here's hoping.....
The only even remotely sentient part of your entire post was basically a petty attempt to own me over a mistake of 5%? Otherwise, the usual gobbledygook. And that took you all day to compile? Wow. Sick burn
Bluerill,
Every time you are shown to be talking rubbish you come out with another load of theories that contradict what you previously wrote.
Now it is small private investors fleeing a company that isn't to be taken seriously anyway and therefore it isn't a problem if they're throwing away $2m of their cash.
No suggestion as to why they might actually do that at all? I.e. embark on a non-serious, useless $2m buyback to use your own characterisation.
The waiver is 25% of the daily trade, by the way, not the 20% of some average you've dreamed up and incorrectly quote. As I said, you've got a lot to learn about buybacks. Do a search on 'successful buybacks', I did, and the first link happened to be about Buffet, but I'm sure you can find some others to read as you are well above his advice.
An investor asks a sensible question and gets told he is 'silly' 'stupid' 'a bore' 'ignorant' 'arrogant' and told he is writing 'gibberish'. What is wrong with these people?
And IMO, to write that a crackpot company in a crackpot country working with crackpot bankrupt partners, led by its current management team of self enriching overpaid previously- bankrupt horse traders, acts independently of its majority holders with over 75% of the share count is naive at best but more accurately absolute gibberish.
brilliant bluerill, simply brilliant.
Bluerill ". I'm sorry, but the rest of what you wrote about how the buyback is being 'handled' (huh???) and 'desperate sellers' is simply gibberish."
Is it really? You obviously don't know much about buybacks and especially about the best way to handle them.
Here are some of Warren Buffet's opinions, you might have heard of him, about some of the best ways to handle a buyback (huh?) and some of the worst ways (huh??). And the methodology he prefers (huh???). Just to get you started, as your comments appear to indicate you haven't got a clue.
As a flavour for those who don't want to be clicking on links, Buffet said, "Many management are just deciding they’re gonna buy X billions over X months. That’s no way to buy things". Substitute '£25k every day' and the penny might drop when I talk about handling a buyback.
Buffet also says, "Can you imagine somebody going out and saying, we’re going to buy a business and we don’t care what the price is? You know, we’re going to spend $5 billion this year buying a business, we don’t care what the price is. But that’s what companies do when they don’t attach some kind of a metric to what they’re doing on their buybacks"
https://www.cnbc.com/2018/08/31/warren-buffett-explains-the-enduring-power-of-stock-buybacks.html
Please do point out the "gibberish" parts of what he is saying. After that, talking of gibberish, you can have a go at explaining how the company and 'one or two buyers' are 'absorbing' the daily volume of shares and the price is still falling.
None of which gets us any closer to who the seller is, desperate or otherwise.
I only 'add' when you write something, um, not so smart, and i'm afraid you've got a knack for motivating me a bit more every time you post. Nothing you wrote makes any sense as you continue to betray a shocking lack of understanding about markets. The volume since the buyback began has significantly EXCEEDED the company's 100k shares/day and i'm trying to explain to you that much of that has been absorbed by one or 2 buyers who have been patiently putting up bids, particularly off-book and building a position. I'm sorry, but the rest of what you wrote about how the buyback is being 'handled' (huh???) and 'desperate sellers' is simply gibberish.
Bluerrill:" why not try and determine who the buyer may be? ... very patient buyer sitting on the bid, dealing primarily off-market, building a position. Wonder who that might be?"
Well, I think that's the company buying and cancelling the shares, via Cantor. No one is building a position, certainly not of corresponding size, which is the whole point of the discussion. We know who the buyer is. The clue is in the term buy-back.
Maybe someone else has some plausible contribution to make as to the seller(s) and why the buyback is being handled so badly. Or Maybe you can come up with some source for your mythical upper limit set for the buyback in cash terms!
Bluerill:"As for the 100k sales each day, it is likely related to, for the time being, the seller filling the company's daily demand, which is obviously a known quantity of near enough, 100k shares."
How stupid would that be for a seller apparently desperate for cash?
Bluerill: " This is a silly discussion, "
Don't take part then. I didn't start the discussion, but I think it is a worthwhile question. You have made clear you think it is irrelevant, so nothing for you to add then.
Meantime, if you really want to engage your forensic talents, why not try and determine who the buyer may be? While it's certainly true that since the buyback was announced, the share price has gone down a bit on a seller using Cantors' buying as a 'liquidity event' , it is also pretty apparent that, obviously outside of the company, there has also been a very patient buyer sitting on the bid, dealing primarily off-market, building a position. Wonder who that might be?
This exaggerated modesty routine of yours is a bit tiresome, if deserved. This is a silly discussion, which you're trying to elevate to something relevant. Even if the seller has a million shares, they are 'small' insofar as they are neither an institution nor a market maker, but a private holder. As for the 100k sales each day, it is likely related to, for the time being, the seller filling the company's daily demand, which is obviously a known quantity of near enough, 100k shares.
In 5 of the last 7 trading days blocks of 100,000 shares exactly have been released.
It seems like odd behaviour from individual 'small holders' to me, but then what do I know?
The 'seller' may be one or many, but it is definitely constituted by small holders and not from 'inventory of market makers', primarily b/c there is no such thing anymore. Market makers, such as they are today, mostly keep very tight books, which means very little 'inventory' even overnight, never mind for any length of time, and particularly not in a name like san leon (i.e., small and generally illiquid). You honestly don't know what you're talking about on this one, sorry.
Well, we don't seem to be getting anywhere identifying a seller. My theory that the sales are coming rom the inventory of market makers first and foremost, rather than P.I.s realising losses, appears to have fallen on stony ground, and I must admit I'm not very au fait with exactly how they work in terms of holding stock inventory. So I looked it up. I thought this seemed to rather confirm my suspicions:
" Understanding Market Makers
The most common type of market maker is a brokerage house that provides purchase and sale solutions for investors in an effort to keep financial markets liquid. A market maker can also be an individual intermediary, but due to the size of securities needed to facilitate the volume of purchases and sales, the vast majority of market makers work on behalf of large institutions."
""Making a market" signals a willingness to buy and sell the securities of a defined set of companies to broker-dealer firms that are member firms of that exchange. Each market maker displays buy and sell quotations for a guaranteed number of shares. Once an order is received from a buyer, the market maker immediately sells off his position of shares from his own inventory, to complete the order. In short, market making facilitates a smoother flow of financial markets by making it easier for investors and traders to buy and sell. Without market making, there may be insufficient transactions and less overall investment activities.
A market maker must commit to continuously quoting prices at which it will buy (or bid for) and sell (or ask for) securities. Market makers must also quote the volume in which they're willing to trade, and the frequency of time it will quote at the Best Bid and Best Offer (BBO) prices. Market makers must stick to these parameters at all times, during all market outlooks. When markets become erratic or volatile, market makers must remain disciplined in order to continue facilitating smooth transactions."
P.S. Bluerill - at no point did I say that market makers were not fulfilling their obligations. Your reply seems to imply that I had. Also the motion to have a buyback was put up by the company but decided by vote at the AGM, and the major shareholders, owning a majority, obviously decided to have one. So, the decision was indeed theirs.
Check it out, BS. I've gotten 3 'blueprick upticks' already in little more than an hour for my tiny little post throwing shade in your direction. That may be a record for me, but I want everyone to know that I couldn't have done it without your consistent habit of combining Trump-levels of ignorance, arrogance and bitterness every time you stumble in. Please don't stop sharing.
'under certain circumstances, urgent circumstances, profanity provides a relief denied even to prayer.' that said, i'm not sure mark twain would have considered bluerill's celebral insights on this board amounted to 'urgent circumstances'. but i guess BlackSwan sees it differently, feeling perhaps threatened (..intellectually?). actually i'm just miffed that bluerill has now been notched up to same profanity level as me. keep the poetry flowing man. best regards, Alprick.
I might consider stopping to comment on your profane reconfiguring of my nickname if 'blueprick' wasn't far and away the closest you have ever come to writing anything remotely interesting....... otherwise all you have ever been good for is sending me to the dictionary to look up the conventional spelling of 'gobbledygook'
Blueprick In one of his more lucid and insightful postings of 25 Oct, managed to focus his "ageing brain" as he says to offer us one suggestion as to who could actually be selling - Brandon Hill Holdings of all people!
One could even go on to speculate that the buyback may provide an opportunity for "friends" of SLE/OF, such as Brandon Hill Holdings, to cash out on some of their SLE holdings via this guaranteed buyback - maybe a too good an opportunity to miss.
Wow, its hard to know where to start. Firstly, the 'major shareholders' - I assume you're both referring to Tosca and Midwestern - didn't 'decide' to buy back shares, the company did, and management were under no obligation to do so. Though everyone who doesn't sell sees their holding rise, this small buyback won't change anything materially. What was, will still be. Tosca will still be have a super-majority, going from 71.9% to 72.6% approx, while Midwestern will move from roughly 13% to 13.17%. What WILL change however, is that future cash returns and earnings will be spread over fewer shares of course - benefitting all remaining shareholders equally - and make it a tiny bit easier (ie., 6m shares fewer to have to deal with) for Midwestern/Jite to initiate some kind of corporate action which, as they still owe us some 140m or so quatloos, they are clearly incentivised to do (I wrote about that extensively after they first bought Suntrust's stake). In that scenario - the only one that credibly matters right now - our interests and Tosca's are completely and utterly aligned. 2. I agree that operational improvements - which several of us have explained will be driven off already-announced initiatives on the fso and pipeline for Q1/Q2 2020 , plus further drilling- will ultimately drive the share price, but considering cash + discounted future cash alone, the shares are already worth 40p+ in my estimation, and THAT target can be reached simply with greater clarity on capital returns. 3. The daily share purchase limit of roughly £25k purchase is an obvious one. I cannot remember if I confirmed that with the broker or the company, but regardless, its not worth debating. The near-identical amount 22 days in a row tells everyone it ain't gonna change. 4. The 'market maker' discussion is potentially a long one and therefore for another time. Suffice to say that no one is not 'fulfilling their obligations'. Registered market makers will make a 2-way price in san leon in a nominal size - 20k usually - at any time on any day, though these days no one particularly likes the bid-offer as the 'spread' between where they are willing to buy and sell shares is quite wide. However, various information sources, both on exchange and off, are available to them that allow them to both increase their dealing size and tighten the spread when approached on a name like san leon. Intermediaries such financial advisors through which small shareholders might use to leave their orders,should be aware of these additional liquidity sources, and thus should never rely on just the screen price when taking orders. All this said however, life in 2019 in AIM small-cap resource shares, across the board, is unfortunately a far less liquid environment than even a few years ago, but that is down to a multitude of factors - from new fin regulations, to the financial crisis, to the massive overhaul still ongoing in the fund management biz - and not to market makers
Blackswan: "mop up the shares from the small investors who are prepared to sell leaving them in total ownership without them spending a penny extra from their own pockets."
thanks for replying. I fully understand what you are saying and that is what appears to be happening at the moment ....
except ... as I asked in my post, just how many shareholders are prepared to take a loss at this price (E.g. when they could have got 5% more last week) and are surely realising a loss at the current prices? I would suggest there are very few who are THAT desperate for cash or have a better place to put it knowing that there is a load of cash overdue to be paid out (under written agreement) as well as positive news on the way, probably later rather than sooner, but still due.
I don't see positive RNSs particularly raising the share price as suggested by bluerill, its been a long time since operational RNSs did that in SLE and the price doesn't even respond to the oil price rising.
It WILL respond when SLE announce the distribution of that cash, though, at least temporarily, but ultimately they're going to have to show an operating profit before they stop the rot in share price, I believe, or announce take-over prospects.
Also, if the major shareholders are intentionally doing what you suggest (and I'm certainly not denying the possibility or the actual current reality of what you say) its a very fractional, slow approach AND unsure, unless they have a grip on exactly who holds how many shares and where. The registrar should be able to furnish them with exactly those figures, but not who would be willing to sell at a loss. And if someone is prepared to sell at a loss, why not sell more at a higher price rather than taking a little less every day?
This is my point about market makers having to provide liquidity. Surely these sellers are not entirely dependent on SLE's buyback and wouldn't be able to sell otherwise? That would suggest the market was broken and the market makers were not fulfilling their obligations, as I understand them. I may have got it wrong at this low transaction level, I acknowledge that, which is why I'm asking it to be pointed out if I have.
Otherwise, the conclusions you draw appear to be one possible answer. Another is that the pre-set parameters SLE gave Cantor were unbelievably mis-managed. I wouldn't rule that out either, but seems even less likely. More likely they badly misjudged the situation ... so the question why they don't cancel the buyback then comes into play.
Sigh...
Bluerill, "you have a number of important misconceptions/misunderstandings about how market makers operate"
I may well do, I acknowledge that, which is why I'd like you to point them out if I have. However ...
Bluerill:" one quick clarification for you: It should be absolutely clear by now on the evidence (ie., every RNS on the buyback thus far) that the company is limited by the regulator to around £25k per day. Simple"
No such limit has ever been stated in any RNS by SLE or in any buyback I've ever followed. Just because they have chosen to spend £25k (plus stamp duty) each day doesn't in anyway imply a limit imposed by the regulator. In fact, the more usual regularatory limit of 25% of daily transactions was waived, which was made clear in the original announcement.
If there is such a limit placed then it is clearly laid down in the "pre-set parameters" laid down by the company, and not by
the regulator. SLE didn't publish those pre-set parameters, or what it hoped to achieve, which is one reason I have so many questions.
"San Leon Energy plc today announces that, pursuant to the shareholder resolutions passed on 27 September 2019 at the Annual General Meeting, it plans to acquire ordinary shares of EUR 0.01 nominal value each ("Ordinary Shares"), up to a total value of USD 2.0 million (the "Buyback Programme"). In accordance with the shareholder resolutions, the Company is proposing to acquire the Ordinary Shares at a maximum price of the greater of (i) 105% of the average market price of such shares for the previous five days and (ii) the higher of the price quoted for the last independent trade and the highest current independent bid or offer for such shares.
The Buyback Programme will be independently managed by Cantor Fitzgerald Europe, the Company's Nominated Adviser and joint broker, which will make trading decisions independently and without influence of the Company within certain pre-set parameters.
A buyback of Ordinary Shares on any trading day may represent a significant proportion, or possibly all, of the daily trading volume in the Ordinary Shares on the London Stock Exchange (and may exceed the limit of 25% of the average daily trading volume, as laid down by Article 5(1) of Regulation (EU) No 596/2014). The Company may therefore not be able to benefit from the exemption laid down in Article 5(1) of Regulation (EU) No 596/2014. The Company confirms that it is not in possession of any unpublished price sensitive information, other than the information disclosed in this announcement."
So perhaps I'm not the only one with some midunderstandings surrounding this, unless you are party to the 'pre-set parameters'? I have not seen them, either in the AGM general document for allowing a buyback or any other RNS, but its possible I missed them. I don't think so though.
Its not cynical; its simply senseless.
I hope it wouldn't be cynical of me to suggest that that the major shareholders are in fact using SLE's own interest income/cash in the bank to in effect indirectly take over the company for their sole benefit - ie maintaining the own capital investment levels whilst using the companies cash flow from interest income to mop up the shares from the small investors who are prepared to sell leaving them in total ownership without them spending a penny extra from their own pockets.
yes mr edwig dont tax mr blurill with your stupid questions and go and stand in the corner of his public school ready to be bullied later. he is superior to you and you better remember it.
sigh....eadwig, you have a number of important misconceptions/misunderstandings about how market makers operate in today's damaged market, particularly in small AIM names, but respectfully, it's not worth correcting them. In a month or 2, the buyback will end and I'm confident we will see further announcements from the company on everything from updates on the fso and pipeline progress to further capital returns, and the share price will (much) better reflect operating fundamentals , valuation, and increasingly tight supply. However, one quick clarification for you: It should be absolutely clear by now on the evidence (ie., every RNS on the buyback thus far) that the company is limited by the regulator to around £25k per day. Simple
... here is today's example of what I discussed below in this thread:
11:28:10 21-Nov-2019 25.70 GBX 100,000 25,700.00 Off-book PRIC AIMX*
11:29:30 21-Nov-2019 25.70 GBX 97,276 24,999.93 Off-book AIMX
* The trade flag PRIC = Negotiated Trade Waiver Condition: N, PRIC, NLIQ, OILQ are all 'Negotiated trade types.'
It obviously isn't coincidence so can anyone describe what is going on? Or answer any of the questions below?
Why don't SLE's buyers at least up the daily value while the price is so obviously low? There is no restriction on them from doing so, unless their initial instructions were very inflexible and unusual and I don't remember them being so.
Are the major shareholders and/or board quite happy to cancel a few thousand more shares as the price continues to drop and see that as a desirable scenario? If so, why?
Are they content to prolong the buyback process well into January as this same buy amount each day will extend to?
Will they then announce another $2m programme in 1Q2020? Will this put off any dividend announcement for another 3 months at least, or will they announce a dividend while the buyback programme is active?
What will happen to the price when the buyback ceases?
Would two quarterly buyback programmes be seen as fulfilling the promised bi-annual return of value to shareholders from the loan note agreement? If so what happens to the rest of the cash? We know they had plenty on hand and have said nothing other than a dividend will be announced in 'due course'.
What are the board actually trying to achieve with this buyback programme? Clearly this type of buyback approach isn't returning any value to shareholders and was never likely to given the circumstances and style we now know prevail in a company with very few daily transactions.
Who among the shareholders here actually think the current programme is paying them any value?
Do any holders think that perhaps the experiement should be cut short now ... or is that squeee on 'free float' supply just around the corner with almost 40% of the buyback completed?
A lot of questions for discussion and any answers will be speculative. I'd still be interested to hear from people, especially anyone who believes anything I've pointed out or questioned in this post and my previous in this thread is incorrect in any way and why that is so.
NB. I'm not 100% certain that the £24,999.93 purchase is today's buyback tranche, but I'd be prepared to take a bets on it that tomorrow's RNS will confirm it is.