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Consolidation and Dilution are entirely different Corporate Actions. So why link them together in the same debate unless it’s done for mischievous reasons.
FWIW I think in this case Consolidation is quite likely given it’s already been muted. In so doing I believe the intention is to improve the company’s perception and possibly re-classify the shares to suit other markets along with encouraging Institutional Investment and such like.
On the other hand I see no justification that further equity equity will be released at or near the same time.
Placings can’t always be classed as Dilution anyway. If releasing equity subsequently leads to an increase in value (the Market Cap) in a positive ratio to the increase in the number of shares released then the action must be regarded as Accretion. Not Dilution.
Under the current market conditions and potential opportunities I very much doubt any future equity releases will be dilutive. By intention they will be value enhancing and accretive in my view. At least in the short to medium term with growth and increasing shareholder value featuring so high on the company’s agenda.
The reason why the SP is where it is there has been more sellers than buyers since relisting. Simple reasoning and math since the last placing justifies the fact that there is absolutely nothing untoward going on here. The SP won’t be staying down at this level very much longer in my opinion.
Those that disagree should either sell or stay silent until they’ve done their own calculations and are prepared to share them to support their innuendo. The pathetic FUD created here by some with an obvious trolling agenda is less than discrete and hopefully genuine shareholders won’t be taken in by it .
AIMHO
Great post Tedoby. They proteth too much
Nice post tedoby spot on.
It was one poster that kept pushing the word PLACEMENT in many posts that pushed buttons in individuals.
Posters that I thought were level headed came out sounding ‘not there usual self’.
With the big news in the pipeline that has been researched and discussed to death on here, if there ever was consolidation needed then it’s on here.
Slightly different rhetoric - seen a few posts with - THIS IS HAPPENING!!!! Now it’s a “Who knows what’s happening?” Lol. GLA
spot on tedoboy.....
A raise after consolidation, but what you have missed is the reason behind such a raise which would be for acquisition, no other reason to do so, an acquisition which would add value to the BS and P&L. Some have shown their true colours this weekend - pathetic.
The point is that there was a raise for an acquisition and the share price is much lower.
So we hope for a far higher share price before another placing and acquisition. Because so far there's no shareholder value.
I'm not saying there won't be shareholder value going forward, but you might forgive the concern if a large placing occurs at circa 20 percent lower or more than the pre-suspension price. And again, I'm not saying there will be, we don't know.
One better reason to attract and bring on board a DIRECT INVESTOR not another wonga
lender, that investor may bring dilution but will support not stifle the company
:))
Spot on Lok, its that simple
and good to see you on this board tedoby
if so a provider of some very in depth stuff on another board I was on
similar to Charlie and Tiburn level knowledge and tech nouse
:))
Need to do some market research m8 , the share price stuck do to mass confetti dilution
with a set of wonga lenders not investors and until they have dumped like a million
shares before us held down by their sells stifling any rise
They have no interest in the company just squeezing quick safe profits from discounted
issues , placings at 0.20 and 0.32 and warrants out their at 0.15 0.26 0.39 will still be making
a nice profit from return at 0.6p sold down to current levels
:))
Correct Noob
until the meat and bones revealed , could be a great result or Arty stepped in something
nasty AGAIN
My hope as said is that it is a measure to attract that upper tier core INVESTOR that will
bring about better quality and supported company growth , that will stick around and
any future raises on a rising Market cap and share price with limited dilution not the
confetti wonga lenders we should now be looking to leave behind
A Main Market Oil and Gas PRODUCTION company set for years of growth , no longer
part of the pump and dump survival financ exploration rainbow chasing group of
companies
:))
I'm aware of the reasons for the current price action, but I think my point stands.
I'm not just talking about me, I'm thinking about how investors will see the company if that occurs, because how they perceive a rapid-fire second fundraise after relisting, and price drop from pre-suspension price, is going to affect their attitude to investing in the stock. Sentiment matters.
Noob is right though that if it is an incredible deal on Cuda's assets for example, investors may not have a problem with it. But it may not be that, we don't know, it may include extra for development, which again may be received well if it comes following a commercial discovery, or not if more exploratory. But whatever it's for, doing it at 0.32 is not what anyone hoped for.
And again, there may not be a placing at all.
@John1970 try again pal.
It's your hallowed BOD talking placings, not me.
They explicitly stated that "marketability of the common shares" was the purpose of the consolidation.
Management Information Circular
May 25, 2021
Page 13
"Basis of Consolidation
The Board is of the opinion that, in the future, it may be in the best interests of the Corporation
to effect the 2016 Consolidation and the Second Consolidation, and such consolidations may
enhance the marketability of the Common Shares and could facilitate additional financings to
fund operations in the future. "
What is another way of marketing shares in order to fund operations, other than placing?
I have no idea why they would want to do it; again it was the BOD who stated in black and white that this was the purpose of consolidation.
I am the messenger, literally quoting corporate comms.
John - most companies consolidate so that it’s easier for them for future placings.
I’m unfortunately invested in wres, they recently consolidated and have further diluted us since.
They are similar to Copl in that they have a steady income from mining yet the sp keeps falling.
It’s a certainty there will be further placements after consolidation…. You guys are turkeys voting for Christmas.
What a bullsht. The companies that consolidate do it to place shares. What a causal connection, stupid argument. Capital increase only if it is necessary!
Wres is falling but on casual glance at the RNS messages, wasn't it also because there was a production RNS at the same time as the placing saying their mine was closed etc?
That said, their share price has halved since the consolidation. RMM has halved since theirs too, with a mine, though also could be said to be a troubled company in various ways.
Some guys here are either fools or parasites or both.
Hadron et al dumping, massive sells meaning we have a lower SP now than relist - holders are being influenced by this and selling, fundamentals pushed far back (assisted by poor Corporate marketing) - if consolidation followed by immediate dilution - regardless of what its used for frankly for many - then 0.2p equivalent is viable, as already battered trust is further decimated.
At that low ebb, enter the new II cohorts with mates rates enabled by this churn and potential dilution, SP stabilises, we move up and rerate to true value finally, attracting the herd as we go.
LTH will benefit no doubt in time, but for those entering for the first time at 0.2p its superb.
AM gets a solid shareholder base, II longer term positions and proportion taken on fewer shares, less churn and more cash in the bank for acquisition or drilling.
There is no loyalty to the shareholders that kept the lights on during the jam tomorrow years - business is war and we LTH are the expendable forlorn hope vanguard first over the barricades.
- COPL need consolidation and a reset - can be a good stimulus
- We dont need further dilution right now - price lowered by a CEO action to provide an II entry price, its low enough now and rerate can still be achieved without this measure.
- COPL will always perceive they need further funds, dilution just another recourse - but production revenue is increasing, $20m RBL is in place, $20m in the bank - this further fund raise is not an absolute requirement for survival as of old.
- What AM gets from dilution is access to new funds that his lender does not have oversight approval on how its spent.
So what could he do with it? The CUDA WI would presumably be number 1 priority, if the lender allows say $15m spend on this ( he has to keep minimum $2.5m on account) the potential raise may be for the remainder required to secure - perhaps accordian $20m may not be authorised until a period of consolidation and payment of main loan capital from Feb 22.
Offers should have been discussed with CUDA - they paid back some funds to Southwestern recently so may wish to do a deal and carry on in some form as partner in BFU if they can.
AM will know by now what scale of funds he estimates he can close the WI deal on - the timing of this consolidation and potential raise following is not unrelated.
Just remember nothing currently factored in at this price , consolidation or not
still sitting around £50m Market value
This article from Cuda on the 9th September states 40% increase in the local NPV10/RR
from December ( was $7.50) to currently
$7.50 + 40% = $10.50 x 31mbo = $325.5m better known at £237.88m
With nothing , zilch , zero factored in , Arty in a now very upbeat US Market could
sell our AQ for multiples of our market value currently , throw in a bit for Deeps
and a re-sale for £300m would be more than realistic
as a growing production company in the safest of safe regions at some point we
will based on hard figures & p/e etc etc be higher than that sale alone value
The markets not the gym invented the phrase no pain no gain
Real lth have endured much pain and continue to sit back and wait for the
gain GLA
o.o.o. rest of the day
:))
https://finance.yahoo.com/news/cuda-oil-gas-inc-announces-002100307.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuYmluZy5jb20v&guce_referrer_sig=AQAAANX2vgEBHVYFVi42NBi-jYJDP-1QwClmQ78TCHTNxZeOEkUTkpnFR56XSR57tQhSfY01sLd18IqPA0ce4jTx-j4Pa5xjcFXhgKBxyHbb6j1dJPhVCZ3uwPIb8nyIi1Cw-ITIGt2NIhtxqUJddt3fR9wLDYj0DSdMFXvQ13-9dKXt
As mentioned before, there is so much to be positive about here...
The asset alone was purchased on the cheap due to the poor market conditions because of Covid.
Since them, oil has doubled in value and still seems to have further to go
We have hedged some of our sales for the next 3 years, which derisks the company greatly
Our production has more than doubled since the start of gas injection
The recent well drilled has shown oil in six zones, testing being done as we speak which may show good results
The infrastructure is modern and the field is new.
We have a distressed partner which we may acquire at a discount
WHAT'S NOT TO LIKE !!!!
My take FWIW is that AM will be in discussion with potential Institutional investors. I've little doubt about that.
Most Institutions have a set criteria that has to be met before they can invest. Invariably one item on their list will be a minimum share price.
If in any Consolidation we see the resultant SP above 1p that should stir quite an interest from Institutions hitherto unable to invest in my opinion. What may have been a stumbling block could become a stepping stone.
To be clear the company has said viz:-
“consolidations may enhance the marketability of the Common Shares and could facilitate additional financings to fund operations in the future."
Emphasis on “could” which shouldn’t be interpreted as “will”
Also there’s no mention of an imminent Placing or one in the short term in that quote as far as I can see and there’s certainly no reference to dilution either explicitly or implied.
To repeat not all Pacings are dilutive. In my view any Placings that may be in the pipeline will almost certainly be value enhancing and accretive. I say that with impunity bearing in mind the positive situation that’s currently unfolding in a progressive market.
AIMHO