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3 delays to audited accounts..Revenue is now downgraded from preliminary statement last month.Profit is reduced from earlier..Finance officer leaves immediately (sacked in other words)Once suspension lifted l am expecting the SP to halve.
DX. plc, a company I hold, had their shares suspended for failing to publish audited results on time. They re-listed about a month after publication of the audited results (that was after a 10 month suspension).
"According to John Lofton Holt it could take from a few hours -> a few days to lift suspension"
Yes he said a few hours to a couple of days but it can sometimes take longer than that.
For comparison Carr's Group who suspended their shares on 4th January eventually released their audited results on 23rd March (a much longer period than Alphawave). FCA granted trading almost a week later on 29th March.
Well, that's a range skewed to the upside given a mid price of 100.7p. Let's see where it really sits on opening.
Manual trading with a price range of 96p-130p is already available
According to John Lofton Holt it could take from a few hours -> a few days to lift suspension
Yes still suspended. It can sometimes take more than a week to process the application to the FCA to lift the suspension.
Still suspended though.
The confirmed changes are minor although negative ones. However the uncertainty clouds have now been cleared, let’s hope the sp will not go down today but will go up next week.
Thank you for your words Barcap.
I hope it works out too but I’m well aware there are risk factors that can invariably come out of the woodwork in ways that can’t easily be guessed which is why it is important never to invest more than one can afford to do without and to maintain a sensible level of diversity.
In the early eighties I was the proud owner of a Sinclair ZX81 with 1k ram connected to a cassette recorder and a black & white tv. I had much fun with it learning BASIC programming code. At college we had a computer lab with a row of BBC Acorn computers. Pity I didn’t follow through with my interest to study in computer science (I think it was called software engineering back in the day). Instead I did a mechanical engineering degree for all my sins.
A search of the web earlier seems to suggest that Acorn went on an unlisted market at £1.20 a share which by February 1985 got suspended at about 23p a share. Then if I recall correctly Olivetti came to the rescue in June 1985 and Acorn started trading again. Eventually the shares dropped to about 9p before suffering another suspension. They eventually made a recovery with the introduction of the Arm chip and was acquired by Arm Holdings. Presumably you got a significant premium on your 8p shares?
Let’s see what tomorrow brings for better or worse.
Regards.
BlueRaphus
I hope your patience and research are rewarded - I mean that sincerely and not in any sarcastic way.
While everyone is jumping ship and laying into AWE ( me especially) you have been solid and resolute so I respect you for that.
Whichever way this one goes you have my admiration.
PS... I owned shares in Acorn Computers at 8p.... Anyone who knows investment history will know what happened next!
Good Luck Pal
Barcap
Good advice Barcap, which is why thorough DYOR pays...
Pick your stocks when they are at great discount and demonstrate significant growth prospects.
With AWE you have a stock that has increased its revenue and operating profits year on year since its founding in 2017 at the rate of 189% and 161% CAGR respectively. It's currently half as cheap as it NASDAQ peers and two thirds as cheap based on its 12 months guidance earnings. All this in a sector where substantial growth is expected for at least the next decade. In 2020 it was ranked outside the top 10 in the world among silicon IP companies, it climbed to 8th in 2021 & 2022, and now holds the number 5 position behind Arm, Synopsys, Cadence and Imagination.
Sit back and be patient - one of the greatest failings of private investors is patience and listening to people who spout certain nonsense about stocks. Have a nice day.
It amazes me how much private investors buy into highly volatile dodgy shares.
It's far better to buy solid companies which are well run and hold for 5 to 10 years.
However, I assume certain Private investors are adrenaline junkies and always looking for the next 10x or 100x punt.
Fools and their money are easily parted.
Maybe try betting on trap 6 at Hackney dogs, you may lose less.
Take care all.
Don't get suckered in.
Barcap
I dont'currently own share in HBR but it looks like a better place to be for a rally than here over the next few weeks.
You've already got a 50% discount here not taking into account the growth prospects.
That's roughly the same discount you have on Harbour Energy only the growth prospects there are more of a lottery.
I would only buy shares here with a management incompetence discount priced in, which is possibly around 60P, getting shares suspended was a massive rugpull, and i imagine existing shareholders will be fuming about it, will take. years to rebuild trust, mickey mouse Directors = mickey mouse share price.
It seems certain that AWE will restart trading tomorrow. Assuming no major correction of revenue and profit numbers, the sp should get above 130p tomorrow easily
In the IPO they set out seven strategic objectives. One of these was to ‘‘expand the Group’s global operational footprint” and within that objective one of their intentions indeed was to set up a “UK design team with a R&D headquarters in Cambridge, and the potential acquisition of design teams or key technologies”. While the Cambridge R&D HQ plan does seem to be on the backburner for now, they have at least accomplished the acquisitions of OpenFive, Precise ITC and Israel based Banias Labs as well as opening a new office in Pune India.
Frankly, I’m not that fussed about the Cambridge R&D HQ plans. As much as I would love to see Alphawave play a role in reviving the UK’s declining semiconductor industry, as an investor, I’m more interested in them keeping their focus on maintaining a highly efficient and competitive business with low staffing costs and overheads. I don’t think a Cambridge R&D facility comes cheap and besides there’s plenty of high calibre talent to be found in places like India. Perhaps if the UK government can provide reasonable incentives then the UK plans could be revisited.
I think the institutions that participated in the IPO; Black Rock and Janus Henderson have already paid a price for their involvement. It was their own responsibility to go ahead at that IPO price.
As for the government, if they want to revive the UK’s semiconductor industry then they’re going to have to provide incentives. Parliament committee for Business & Trade launched an inquiry last year, and notably Alphawave are absent from the list of submissions to the report, but that aside, we are still waiting for the government’s response. They should do something similar to the US example of the CHIPS and Science Act which promises a $52.7 billion investment, perhaps something along the lines of $1 billion investment. If they did, I would expect most of any investment would go to the compound semiconductor sector which the UK specialises in.
The IPO was managed by Barclays and JP Morgan with no private investor participation.
The UK government was very pro the IPO as it reinforced Cambridge as a technology hub.
Also the UK government had relaxed floatation rules to encourage more companies to float on the London market.
Even after the wheels were starting to come off, Barclays were still pushing the shares with targets of 600p+.
So the institutions and government need to take responsibility for whats happened IMHO.
Barcap, it seems that at least you have faith that they'll start trading again! That's a positive!
The opportunity to pick up shares at a bargain price can only happen when the shares are actively trading.
BlueRaphus
You can quote as many ratios and numbers as you like but investment depends on trust, competence and honesty.
Frankly the directors have none.
This is why they are 100p and heaven knows where they'll be when they start trading again.
Cheers
Barcap
“..why is this a piddling little company of just £700m market cap that's got itself suspended at 100p, more than 75% below its IPO price of 410p which was just two years ago?..”
Well let’s suppose it was at £4.10 right now, would this be overpriced based on current performance stats?
This would mean a market cap of £2.87 billion (US$3.57 billion) and based on $192.41 million revenue for FY2022 would give us a price to sales ratio of 18.6.
Compare that to the average P/S ratio of 8.7 for its 8 closest peers in the silicon IP sector, then yes you could argue that it would be overpriced by more than double.
Alphawave’s actual current P/S is 4.6 so arguably it is presently undervalued by 47% and if the P/S ratio were allowed to match the peer average then the share price ought to be at £1.90.
Why is it sitting at 100p? Well, the reaction to the suspension pushed it down from £1.20 (aided perhaps by Vikram Kumar’s Kuvari Partners who added approximately another £700k to their short at the start of trading on 28th April. But primarily, it was pushed down from its IPO price thanks to a shorting campaign effort of several hedge funds / small institutions following the Alphaville article of Sept 2021. The article itself was merely a trigger to start the shorting, while the actual content of the article was largely irrelevant. Shorting often tends to get overdone and it can take awhile for a share to normalise to where it should be.
Why did they short it? It was clearly very overvalued. At the IPO in May 2021 the last reported revenue was $32.9 million for FY2020. This would have given it a P/S ratio of about 116! The silicon IP industry average at that time was about 20, so by this metric Alphawave were potentially overvalued by nearly 6 times compared to its peers. (remember semis and tech were leading the market back then and therefore perhaps even a little overpriced themselves).
Why was the IPO itself overvalued? At that time, semiconductor plays were ‘hot’ and leading the market bull run following the collapse caused by the pandemic. The IPO organisers would have gauged the mood and since semiconductor research outfits were (and still are) projecting massive growth for the decade ahead then clearly institutions like Black Rock and Janus Henderson had no problem buying into that mood and were willing to value new starts like Alphawave on the forward growth expectations.
Incidentally, the 8 silicon IP industry peers I used for my P/S valuation assessment are Synopsys, Cadence Design Systems, CEVA, Verisilicon, Rambus, Credo, Marvell and Broadcom and all based on the latest earnings reports available. I discounted Taiwan listed eMemory Technology as they currently have a high P/S which would have upped the average to 12.3.
So they are going to run the results announcement to the wire!
The second delay announcement said week commencing May 15th so nothing Monday, Tuesday or Wednesday.
2 days left - or this thing is dead in the water.
So Friday looks like the day.
Good luck all
Blue Raphus, I love your recap of the results, you make me want to buy shares in Alphawave, you should write for the company!
But there is one question that demolishes it all (and it's said with all due respect), so why is this a piddling little company of just £700m market cap that's got itself suspended at 100p, more than 75% below its IPO price of 410p which was just two years ago?
Something ain't adding up, right?
"The AWE CFO was/is a sophisticated individual and is very financially aware.
He's worked mainly in the high end banking industry for big multi national banks.
He left Barclays to come to AWE as CFO.
Some have mentioned he's inexperienced but that simply isn't true."
As BrokenSmoke said, we can only speculate. I generally agree with your points about Daniel. However, for all of his excellent background and experience in the banking industry particularly in the technology investment sector, he does not have any past experience as a CFO of a public listed company other than the time he's been with Alphawave.
He's still the CFO by the way until the audited results are published.
Alphawave are now looking for an experienced CFO who can carry it through its next phase of substantial growth.