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Surely time to be taken private?
Damn right. The big investors would surely be delighted to take 200p per share at this point.
The question is, would Braben? He probably believes the current skyhigh broker valuation, meaning a quarter billion £ loss to him.
Braben has consistently shown the kind of arrogance that holds out until the house is smouldering ash. What he should have done is step up, apologise and promise a recovery plan, but the latest annual report is completely the oppsite.
Yank, i don't feel that DB is arrogant. My concern is that he is too paternalistic to make the job cuts required here and perhaps the culture is one where there isn't enough criticism of what is developed - they do seem to release buggy code, at least initially.
That said, i have made a small purchase this morning in the belief (hope?) that the Warhammer RTS isn't as bad as i originally thought. I quite like the editing features which seem to draw on their strengths from the various "Planet" games.
We know the free float is relatively small here which tends to emphasise moves in either direction. A MV of £100m might make them a takeover target, although i've never felt DB is likely to sell.
ATB
"We know the free float is relatively small here which tends to emphasise moves in either direction."
Is that your theory for the one direction the SP has gone since the day of the last flopped game release? Down. 60%.
I think the better theory is the bank investor is pulling out, as we can see from the TR-1s on RNS. Hence the daily autosell driving down the SP.
The Warhammer question is not will it be less bad than it looks, or even how much of its ridiculous £20m development cost will have to be written off. It is, is it the start of a credible recovery plan that will persuade the bank to turn off its autosell?
Good luck with your buy in. See you in a week when you've lost another 15%.
Almost everyday there is someone offloading share. It must be an institution. Sadly there is no RNs to disclose them. Probably is selling slowly because market makers cannot find quickly a buyer. Until the seller is out this will continue to fall
Cascudi, after weeks of breaking the rules by concealing hareholding changes, Frontier on website have now come clean and declared the big sellers. It is the two top institutions, as I predicted. The lack of RNSs is a disgrace and I am minded to file a complaint on this. Meanwhile the shortage of buyers means these sellers' 8% will take about a year to clear their books. The SP has entered a nuclear winter.
I suggest to shareholders to email the boards to initiate buy back and director to buy some shares
To crypto. OK so you are betting on Warhammer, but where is the sense in placing that bet now and then losing half your value over the next month of SP drop? Just hold back for one month and buy at the bottom the day before the Warhammer release.
Gracious Prudent, I must thank you. One week ago I was about to buy, and my decision was based on the idea that bad news was already priced and nothing else could go wrong, and on the good previews of the warhammer thing. Luckily I stumbled on this site and read your, evidently well-informed, opinions. I hope I don't abuse your kindness if I ask you a couple of questions: How do you know that the development cost of W. is 20 mil? I don't find that kind of info in the reports. And then you wrote "That seller who was dumping 10K shares at 16:35 each day. Yesterday it was 20K. Today 30K. The daily SP fall is roughly proportional to the size of this dump." Can a daily deal of a few thousand pounds produce such a crash? Maybe the questions are too naive and you don't have the patience to answer, in that case, I completely understand and thank you again.
Filippo I have been asking myself the same question.
I am not an expert but to sell you need someone to buy if there is no a buyer and you need a price. Who is buying at the moment is willing to buy at big discount. That is my opinion. The other thing is that also this shares as only 30m outstanding shares so a small sell is still a big sell. If you trow a stone in the sea you don't make big wave movement but if trow a stone in a small pond you can make a big movement
Ok, to be clear, for me it's not just about Warhammer: i think there is quite a lot of value in the back catalogue, there are some good developers, but too many of them, there is a chunk of cash still, and i think the market is potentially writing off Warhammer prematurely. The mood is so overwhelmingly negative that it makes me want to buy. I'm a fairly contrarian individual!
I have started with a small investment. If Warhammer flops then i will probably just sell at a loss. No big deal. If i see some cost cutting or takeover interest or improvements to Warhammer i may buy more. If that is at lower prices, great.
I rode this share from £1.70 to over £20 in quite a short length of time so that is why i say it moves quickly. When i bought shares just after the IPO, my buys were sometimes the only ones that day so yes it can be thinly traded which exaggerates moves in the SP.
I try to value the business as another games company would. They might think that £100m is cheap for a business with perhaps £20m of cash, some games such as the Planet games which have shown longevity, and a dev team that they could prune probably quite hard.
It's certainly possible the price could fall by half due to various II's selling out, but if the market cap falls to £50m i would be happy to buy more and average down. I've no ability to time the market i just try to buy stuff for less than i think it's worth. My guess is that the SP could drift lower, but there's always the chance that an RNS pops up one day saying its being taken over and then it's too late to get in. Who knows?
I try and size my investments according to my level of conviction. So that's low currently(!), but the fact i've got a few shares means i will follow closely going forward and see what happens.
ATB
Ok, i'm a bit confused on the II's here.
I can see Invesco have reduced. Also Swedbank Robur as per RNS's 18th August and prior, but they are still higher than the 5.8% shown in the last AR so they must have increased and then thought better of it!
So who are Working Capital Partners? Never heard of them. They must be based overseas as they only disclosed at 5% (5% intervals is the threshold for overseas investors). Are they hedge fund, activist investor? Appreciate any feedback.
Hedge fund. Very low profile. Bought in after January's one-day crash. Is now left as the top II.
With Braben owning 33% of the company, a possible t/o looks tedious and unlikely. I was going to buy in, but I will probably wait and see for a week or two. It hit 631p on the 27th July, what a fall. Personally, I cannot see this testing less than 200p, great upside if they get their ducks in a row. It will be good to see who owns what, when the dust settles. At these prices, there is certainly value.
Thanks. As you say, Working Capital are a very low profile outfit. Be interesting if they were to go over 10%. They look to be the main buyer currently, probably just as well! Perhaps they will bring some pressure to bear on the board for cost savings?
We don't usually get a TU until January so most probably this will drift until then i guess. Very much a wait and see for me at this stage.
Fillipo. You are welcome.
Your question about share price influence, cascudo"s answer says it all.
Your question about the Warhammer game development cost, £20m is the figure from the CFO in the results presentation video call. Plus £3-4m for marketing.
If you might buy FDEV at any price above cash value you should view that video taking close note of the info the CEO and CFO is witholding and the analyst questions they refuse to answer. There are more red flags than I can count. I did think this share was a train speeding towards a cliff edge, but able to stop.. The video tells me this train has already gone over the cliff and is on its way down to the ground. Time will tell, sooner rather than later.
Best wishes and good luck.
£36 to £2 indicates the ‘train went over the cliff’ is pretty old news. Plenty of vultures will be considering their opinions at this price.
Agree Spacerat, a good time to be bearish on this would have been any time before it dropped 50% in a few months. I was in early August when I clocked poor F1 Manager user feedback and posted as such at the time, while exiting that earlier trade - before company announced corresponding weaker outlook.
Now with the benefit of hindsight every man and his dog seems to be saying the end is nigh. This kind of retail despair can be a pretty good contrarian indicator.
What these calls at the lows miss is that it's no longer a growth play but a recovery/sum of parts one. Yes it may well fall further from here - momentum is currently against it - but if this was on someone's radar as an acquisition target, the dramatic drop in enterprise value will only have made it more attractive.
"£36 to £2 indicates the ‘train went over the cliff’ is pretty old news."
The train to which I refer is the business rather than the share price, as I thought was clear. The wise investor understands they are very different things, often connected only indirectly. In this case, the business news of this video has yet to reach most investors.
"Plenty of vultures will be considering their opinions at this price."
I find vultures rarely attempt to catch falling trains, or perch directly under one. They await the crash then pick through the remains. Hence my comment about buying shares at cash value.
Regards.
And topped up with more. Very hard to get a price, however, very easy to get one on the sell side!
Braban’s slice of frontier was worth over £400,000,000 …
Now it’s worth ~£25,000,000 …
These spreadsheet game boffins surely need to learn how to run a publicly traded company?
The realisable value of Mr Braben's shares is a good deal lower than any other FDEV share. Nearer 20p than the 200p your figure suggests.
One reason is the devaluative effect of selling. We saw the IIs' recent disposal of 3% of issued shares depressed their remaining ~12%'s value by ~50%. Had that disposal been Mr Braben's, the devaluation would have been of his remaining 30%. Now consider the same effect upon the next 3%, and the next 3%, etc.
Another reason is the effect of the idetity of the seller on confidence in the company and thereby on share price. Outsider IIs showing they believe the company not worth 200p would be somewhat damaging, but insider Mr Braben showing he believes same would be devastating.
In practice however Mr Braben would probably boost the value to buyer of a disposal by offering his resignation. Indeed his stepping down as President might alone sufficiently raise confidence of major investors and hence his holding's value. This is true notwishstanding that his stepping down as CEO last year for it seems probably the same reason has unfortunately yet to yield the benefit to any shareholder.
Prudent you have some very good DD. Is it only FDEV you are invested in? Would be interested to know any other companies you are involved with.
Prudent - At this price the reverse is more in play. Too cheap now.
Is it too cheap though?
October 2016 they were circa same price as now but they had huge plans for their cash cow Elite.
2019 they launched Foundry which should have begun a success as a 3rd party publisher.
Both currently buried under rubble.
A possibility of a share issue. What for though? Surely they should be cutting headcount and scaling back so it’s not needed.
They floated - they completely balls’d it up. Do they now need another cash injection to do anything substantial?