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All good Nidec. I was just trying to get my head - again - around the numbers. The only hard and published numbers for the free float available were for the shares in the public offer (8.34% of total at IPO), selling shareholders (1.26%), over allotment (1.44%) and unlocked shares (3.32%) summing to 14.41%. This is different from the 17.9% quoted by Reuters or the 27% given to you by IR so I was keen to understand where the difference came from.
When I saw that the same figure of 27% in the prospectus for ‘‘shares in public hands’ and that this number can include locked-up shares of up to a 180 day duration according to the Listing Rule 6-14-3 (R) quoted in the prospectus, it started to make sense to me. But putting 2 and 2 together in this case does, indeed, not necessarily make 4. It may all come down to definitions, but it seems to me that the Wikipedia explanation is a little different from the Listing Rules.
The only relevant information really needed, IMO, is the difference between how many shares are tradable before and after the end of the first lock-up period, as this would give a better appreciation of any market reaction.
How the market will react I see as something akin to understanding whether directors are buying or selling and how many are doing so. Of course directors cannot trade until next year, but those being unlocked on 28/10 ( the date is calculated assuming that the 30/4 is included in the 180day duration) have more information about the company than we do, so If they start selling - or not - could give an indication as to their thinking.
I concur with your view as to how Summit and KKR may wish to play the game and for this reason, IMO, DT will have a limited life on the public market.
If the VC/PE firms decide to sell, then a lot more shares on the market could depress the share price, but in general these types tend to invest for the long haul and when they do sell it is often en-bloc to another VC//PE firms.
Hi Lending.
No debate, in fact I think we are basically saying the same thing but in different ways.
If we look at Wikipedias explanation, as an independent body;
"In the context of stock markets, the public float or free float represents the portion of shares of a corporation that are in the hands of public investors as opposed to locked-in shares held by promoters, company officers, controlling-interest investors, or governments" and with particular reference to the UK : " once the company is listed, the business must be independent from any shareholder with controlling interest (anyone owning more than 30% of the company shares), and after the company is listed, at least 25% of its shares must be in the hands of the general public, that is public float"
Whether or not locked-in shares held by institutional investors are classed in the same way as those held by promoters, company officers, etc is, to me at least, unclear.
I would think that only the 27% of shares would be tradeable after end of October. Its not a huge percentage but it does cross the required threshold.
This article lists the different shareholder groups
https://simplywall.st/stocks/gb/software/lse-dark/darktrace-shares/news/what-kind-of-shareholders-hold-the-majority-in-darktrace-plc
As I understand it, the 27% seems to be approx 19.5% general public and 6.7% institutions, with the bulk shared between individuals, VC/PE firms, and employees shares scheme.
I would think the VC/PE firms can sell as and when they choose, the individuals and employees may be tied-in longer term.
OK Nidec. No point, I guess, in having an open debate on the matter.
My source of information is the Prospectus where all is covered in great detail including all lock-up arrangements (and how they are to be administered) and the figure (27%) for ‘shares in public hands’ which is very much smaller than the number subject to lock-up. My understanding is that ‘shares in public hands’ is different from ‘free-float’ while some shares are subject to lock-up, but will the same when there is no longer lock-up. So IR would be correct after 28/10 regarding the free float, but before?
All I really want to know is the % of shares that will be potentially tradable on 28/10.
- Is it only the the 27% ‘shares in public hands ‘? This would be the current free-float plus those unlocked shares that are part of the ‘shares in public hands’ - that is if my understanding is correct.
-or is it the current free float (whatever the number) plus all those no longer subject to lock-up arrangements?
Lending, the 27% free float came from Darktrace Investor Relations, as did the period of lock-up and who determines if/when anyone can exit early.
Any shares under a lock up agreement can be deemed as being 'shares in public hands' as they are in the hands of investors rather than Darktrace themselves, albeit the investors have agreed not to sell for a set time.
Nidec - I respectfully suggest you look at your contribution on 25/8 where you state that the free-float was then 27%. This figure is not in line with my interpretation of the Listing Rule and information in the Prospectus - or on published information by Reuters and others. The figure of 27% is for the “shares in public hand” and this figure includes many locked-up shares. And it was or this reason I thought it worthwhile to share my “ research” on this BB.
It was actually your statement that the free float was 27% and a question today about the timing of the end of lock-up that made me take another look and really try and understand what it is all about.
To me at least, the number of shares potentially available to the market 0n 28/10 is aN important piece of information.
I think L is right. A single definitive version of the facts would be a really good idea, as there have been a lot of variations on this theme. And there has been some significant elasticity in interpretation within the supposedly defined parameters.
"Maybe Ask Dark Investor Relations directly if any questions on Free float and lock up periods etc … it’s a great question and good to know the answers"
or maybe people could just read the thread as both questions have already been answered multiple times.
I, for one, have not been clear on what constitutes “shares in public hands” and how this differs from those in “free-float”. If anyone is interested, here are some referenced facts.
To be admitted to the London main market at least 25% of shares must in public hands (Listing Rules.14.1-R). So it is not the free-float that must be 25% but the "shares in public hands"'
Shares are not held in public hands if they are “subject to a lock-up period of more than 180 calendar days” (LR.14.4-R). So shares can be in public hands even if locked-up for 180 days and not be part of the free float.
On admission DT had 27% of the shares in public hands (prospectus, part 14-1 - it is also the actual on admission). So not all the 27% will be in the free-float until the end of the lock-up period. It is not clear to me whether the 3% of the shares released from lock- obligations were part of the 27% "shares in public hands" or in addition to but presumably they entered the free-float.
The actual free-float figure remains a mystery to me – but Reuters quote 17.9 %.
The end of the lock-up for most of the original non-employee shareholders is 180 calendar days from 30/4/21. Therefore this will be on 27/10/21 - trading can take place the following day. Those locked-up shares that are part of the “shares in public hands” will, presumably, therefore then enter the free-float making it 27% from 28/10/21. So the number of shares released to the free-float for public trading, although substantial, is not as is not as large as I first thought.
But, presumably, the rest of the shares - not part of the 27% - freed from lock-up restrictions could somehow also enter the "shares in public hands" and hence the free-float.
For the employees, the end of the 360 day lock-up period is 24/4/22.