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The 16:35 daily sale was today 52,261 shares. An all-time high if I remember correctly. Is anyone tracking this to project when Swedbank and Invesco's divestment will complete?
TinyBuild CEO underwrites capital raise
https://www.investorschronicle.co.uk/news/2023/12/21/companies-roundup-globaldata-shares-tinybuild-s-radical-fund-raise/
TinyBuild’s radical fund raise
Banks and other financial institutions often underwrite equiĵty raises so to give a guarantee to others taking part in the issue the whole transaction won’t fall apart. TinyBuild (TBLD) has gone for a more radical approach.
The video game developer has seen its balance sheet and market capitalisation crumble this year, with its share price falling 96 per cent. To keep operating it has announced a $10mn (£7.9mn) raise, almost double the current market cap, fully underwritten by chief executive Alex Nichiporchik. This is the same chief executive who sold £55.8mn in shares in the 2021 IPO. Shareholders may be more focused on the massive dilution and complete wipe-out compared to the IPO price of 169p a share.
Those same investors will have to support Nichiporchik taking up to a 59 per cent stake in the company through the raise, which will also dilute their holdings significantly. Atari is also putting $2mn into TinyBuild. The company, or its Nomad Berenberg, flagged the realities of the arrangement. “The ownership levels of the CEO may have the effect of delaying, deferring or preventing a change of control, merger, consolidation, takeover or other business combination or discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of the company, which in turn could harm the trading price of the shares,” TinyBuild said. AH
Any propective new investor sees the cause of those years of failure isn't lack of investment but lack of management. So he would not ask those responsible for commitment to stay, but commitment to leave. Remember this conversation was probably already had with incumbent investors Swedbank and Invesco. Management stayed, investors left and soon so did 80% of company value. Any new investor would foresee that the remaining investors who have already lost a pile at the hands of David Braben, Johnny Watts etc. would quit in despair and tank the new invetment share value if the announcement of this dilutive cash rescue came from the same clowns.
Again I could have been clearer in what I said. I wasn’t talking about insider trading. AFAIK they are not in a closed-period (big news closes trading for insiders) so any trading is unlikely to be seen as insider.
What I meant was, that there could have been a deal set up between Tencent and/or II’s and the Board of Frontier to survive the past 3 years of failures with new investment and that it requires a commitment from the board. This usually means an investment from directors, hence the buying on the 13th. It’s the sort of thing Private Equity does to ensure a commitment. Although I would expect the sums invested by the CEO and CFO to be larger. So I’m probably wrong about it anyway. They’ve only invested pocket-money. Just seems odd they all do it on the same day. I hope that clears up what I was saying.
If it turns out their next CMS game is F1whatever, the SP might be sub £1. DYOR.
We are talking about the directors that purchased and Mitchell did not.
Braben's stake did not prevent the last cash raise in same circumstances so should not prevent the next.
Current cash might suffice if the next game is on time and profitable, but since the last game was both very late and very loss-making, proceeding now without extra cash would be reckless in the extreme. Cash raise is needed ASAP because its cap is already down to £16m and further drop with the share price would render it insufficient to fund akother game.
Yank, to be fair if you look at the last annual report David Mitchell waived his non-exec fee. I don't think he is worried about losing a job which paid zilch last year. His wife is doing the buying in any case and in decent chunks so it shows a degree of confidence that there is value here.
We 've all seen examples of companies where the execs make token buys of a months' salary or so to prop up the price, but six figure buys are real money so more meaningful.
I'm still on the fence here owing to doubts about management, or more pertinently the culture that allows obviously dull games to be released. Are they all too nice to criticise anyone/anything?
DB's stake makes it unlikely that we will see either a takeover or a cash raise IMO, so it's all about the next game really. I expect they have enough cash runway to get that away, but it needs to be successful.
OK, so you're says these directors found out there was a cash investment incoming, didn't tell the market, and instead personally purchased shares.
Illegal insider dealing plus concealment of price-sensitive information. A new investor might want director skin in game, but director skin in jail is not a good look.
No, I'll stick with the obvious explanation. Directors purchased in attempt to support the share price, recognising that the faster it falls, the sooner they'll be out of their jobs.
No you misunderstand what I was saying. This:
“Possibly a sign of commitment from the other directors”
Is not meant for us. I meant to Tencent or the II’s. Sometimes large investors like to see the directors put some skin in the game. Although I’d like to see much larger sums if this were the case.
He has a seat on the board. So I disagree that he's distant from Frontier.
There is no mystery about these simultaneous purchases by directors. This is clearly the usual expression of confidence that directors make to try to slow a plummeting share price when there is no genuine good news to put out. And also to bolster gamw sales, because there's a lot of news coverage of Frontier's troubles and this is bound to discourage purchasers.
However an expression of confidence by this board could seriously backfire. An investor recalling the CEO's confidence ahead of the last few disasters might take this one as a sign to sell.
DYOR - take this figures with a pinch of salt because they may not be correct.
In 2018 they bought 5 lots of shares totalling 120,044. This had an average price of £10.73. Cost £1,288,330. Now worth ~£151,015. Ouch.
On 13 dec they bought 82,000 shares, bringing their average down to £6.84.
On 14 dec they bought 145,000 shares, bringing their average down to £4.46.
Being so distant from Frontier they must be as p’d off as the rest of the investors. But why this sudden investment. Plus the minor buys from the other directors. Possibly a sign of commitment from the other directors? Possibly another cash investment from Tencent incoming? If so, a dilution for current holders. A rights issue? Something brewing? Maybe long term strategy has been etched?
Mitchell is Tencent's Chief Strategy Officer. Oops. His strategy with Frontier has lost Tencent 75% of its stake value. Presumably today's purchase to prop up this falling stock is being put through his wife's name to avoid attracting attention to this corporate embarrasment.
Frontier's public filings identify this James Mitchell as an officer of Tencent who joined the board at the time Tencent bailed Frontier out of an impending cash crisis in 2017, in exchange for new shares amounting to 9% of the company.
Interesting. James Mitchell resides in China and this non-executive job with FDEV is the only one in UK? What does he do professionally in China?
I found a Joy Hu who is based in Shanghai working for an investment company
https://warburgpincus.com/team/joy-hu/
However, Joy Hu in China is maybe a John Smith in England
Oh for the old days eh Yank, when you used to complain that Braben owned too much of the company!
There you go,145k shares by his missus(cough cough).
GLA.
And interesting that there is no purchase by that director himself, James Mitchell of Tencent, or by director David Braben.
The 14th Dec RNS Director Dealings is interesting. Especially the amount of money the wife of a non-exec has invested.
I can see why they fired you first!
Not bad day today
True, and to save any staff at all, Frontier will have to shed many more than the 20% announced.
For comparison, the launch sales target of 1000-person-Frontier's recent Warhammer game was met last week by a new Warhammer game from competitor Owlcat which has just 125 staff.
That's the downsize order of magnitude Frontier has to make if it is to survive on its cut-back plan of just one game release per year.
And this still leaves the productivity issue. The above requires Frontier to lift earnings per employee by about 1000% relative to its three most recent games.
All this will clearly require much work from a competent management team. Fortunately it requires little work from the current management team. Just resignations.⁷
It’s great that frontier wants to be seen as looking after their staff and not let any go, but if there is no business at the end of the day - everyone loses.
Whoo Yank you must have been on the champers today! If only they hadn't fired you maybe it would all have worked out...
"In background it has lost more than 50% in a month"
...which tends to obscure the far more significant fact that it lost more than 20x that in the last three years.
Share price is now far below the placing price at the IPO ten years ago - in an industry that boomed in the same period.
Take a moment to appreciate the degree of ineptitude required to achieve shareholder value destruction on such a scale, and you will see that thid stock will do nothing but fall until those responsible pass control to new management - voluntarily or not.
"Realms of Ruin has £1.6m and looks like an uptick is starting to happen with the Xmas sale."
Complete fiction. £1.6m is fabricated. Steam shows zero uptick. Game is not in any Xmas sale.
"Appears that my speculation about GM takeover was spot on"
... but somehow RNS feed lost the news that GW has bought the inept creators of the biggest videogame flop in Warhammer history for £70m, rather than get them for free by planting a Hiring! sign outside the Frontier staff exit door, or simply by waiting a few months for most of the staff to be laid off.
"And yes, rerate coming"
He got one thing right. Simplywall.st today revalued FDEV at 13p per share. Based on a discounted cash flow model, rather than the broker's "let's not attract attention to how appalingly we f*cked up with last month's pie-in-the-sky numbers" model.
See my post earlier.....like a book.
£1.50 ish
All IMO