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I guess we will see at some point. In a few weeks the 52 week high drops to about 30p and probably a trailing average of more like 20-23p.
£13m* debt on an RCF facility @ 20% is £2.6m* dead, any buyer has an instant saving. Why 30-50p is fairer value IMO.
I think you are getting too emotionally attached to this. Let’s say it’s a PE solution. They will not pay 30p let alone 50p. They will create a structured buy out which folds executive and major holders into ‘newco’. So long as the price stays down at this level for long enough then in theory this structure could execute at 18-20p.
During your 3 year plan you have a cash call to flush out a few holders and increase PE holding and get 3 times your money in 3-5yr window.
Not saying this will happen but what I am saying is stop touting pie in the sky valuations and open up to alternatives. Right now, if I was Oliver that’s how I’d be working out how to get back to the worth I had a few years back. Not concerned about someone holding a few hundred k of shares.
Certainly agree 10p is crazy low. However someone is still providing share liquidity without RNS here.
Just the one week left of February and we are into March which is when we'll see the results
I'm not convinced there is too much I will learn from them: ofcourse we'll get more detail on the numbers and activities but we already know that Plan A is to seek new owners.
The 'post period' updates will be interesting but I would not expect the Results RNS to provide much insight on the process to find new owners; that RNS is one that can drop any time, before or after the results
Because at 30p or 50p a share the market cap is only £30mil or £50mil.
When a bid comes in I would expect those kind of levels.
RedOlive
You are confusing the market cap with the value of the company.
This is particularly relevent when the company is in an offer period
The share price (and resultant mCap) represents the price at which shares are being exchanged in relatively small volumes. I'm still beleive there is more to the Cannacord disposal than meets the eye and we don't know who has picked them up
The big question is whether 10p is still the price per share if you wanted to acquire 10-20% of the company from the 80% holders who have held since IPO
That's why many of us believe that 30-50p is a better indication of what the market value of the company is
This should explain in more detail:
https://www.ruleoneinvesting.com/blog/financial-control/market-capitalization/
Why does anyone think this is worth 30p, 50p...when the market says otherwise? Until we have an an update which will be in the next two weeks it's all conjecture.
For sure. 50p share price seems fair for the business as things stand.
Robswire - That is without doubt my favourite contribution you have made to this forum
Thank you
Magpie Curry
If i was buying Currys for £700m+....
I would, with no hesitation, consider buying Music Magpie to go with it for £50m
I think it would truly compliment the Currys asset and provide plenty of synergies
Bidding war brewing for Curry's, I could see the same happening here.
Great work Tylo - sounds very encouraging.
Putting the debate aside about how great an asset they are: these machines are certinaly very clever!
Stopped by Trafford Asda before and luckily the kiosks was being emptied by one of the employees. I was
Able go explain to the guy who I am, that I’m invested in the company etc etc and he was nice enough to show me how the internals of the kiosk work, how many devices it can hold and how the collection process work, the machine was full of phone I believe we counted 15, he was saying how this kiosk and the one in Trafford centre across the road have to get emptied every couple days because they are some of the most popular locations. He explained how he’s employed by a third party company who is then in contract with musicmagpie, he also explained that he himself drops the phones to musicmagpie head quarters but other workers in other areas essentially box up the devices and post them to musicmagpie for processing. Just thought I’d share this little anecdotal experience
Another thing to note here is Damian has bought £150,000 worth of musicmagpie shares with an average price of around 10p. He’s not exactly Elon musk so that amount of money is not peanuts to him, he also doesn’t strike me as the kind of individual to gamble on things. If he’s buying it’s because he believes in the value and prospects of the business. it wouldnt surprise me to see another RNS of him acquire more shares, someone has clearly been loading up recently. December has 1.4 million website visits, January had 1.5 million website visits so that’s stable and in line with previous years. we have had all the investment in kiosks, website and IT improvements, corporate and domestic rental assets. these investments are well above the current market cap and that’s without all the pre existing infrastructure. They have the musicmagpie brand, Asda partnership ( Asda has also been buying up local co-ops and petrol stations and converting them into mini Asda stores, could be great locations for another kiosk roll out) these have intangible value to them. 10m mcap is pricing the business for failure and severely underestimating the true value of the business . Refurbished tech is very on trend, consumer technology is only becoming a greater part of our lives, phones are essential an extension of ourselves. idk I don’t want to convince myself or you guys that this is all sunshine’s and rainbows because it isn’t, the business has a lot of work to do and the environment is tough and is only getting tougher. time will tell.
JD.com has also enter an offer for curry’s. Looks like many players see the fact that a lot of uk businesses are undervalued at the moment. This could improve sentiment around musicmagpie and encourage other payers to look around and make offers for other uk businesses like msuicmagpie.
Someone still loading at around the 10p mark.
Lets see if news comes this week. ;)
Spiked guns ? Waffle waffle
You can’t have it both ways. We have demonstrated that Rental is profitable and delivers a better end to end ROI on the device when combined with the post rental sale.
Rental does need funding and has been the cause of the net debt. The upside however is it helps MMAG increase EBITDA
You have to play fair.
As I have shared before, all the MNOs fund their subscription models with debt too. Private Equity will be focussing on Gross Margins and not be concerned with the debt.
EBITDA only grew because of the disingenuous margins on rentals of @70%. What nonsense. Who pays the interest and picks up the amortisation costs?
15% EBITDA growth while the higher margin side of the business which is in decline therefore off setting some of that growth. Looks like the business is currently priced for failure and the disc media, kiosks and corporate side are completely discounted.
I've said it before and I'll say it again - you need a combination of three things to get rich investing; Be smart, Be Patient, Be Lucky.
Time and lack of updates is not a concern here at all; MMAG are in an 'offer period' and takeovers or MBOs take time
80% of shares remain in the same safe hands in which the resided last year; the vast majority have been in the same hands since the IPO at c£2. (A large chunck of Schroder's holding was acquired from Liontrust at a lower price)
The number of shares in publich hands was abour 6% before xmas and now up to 20%; most of which have been bought between 9p and 14p.
I firmly believe that any share price movement at this level is irrelevent for the 80% in sticky hands; the movement is more the smaller public holders who have bought recenty (at sub 20p) or in the last 12 months for anyything between 20p and 40p Increasing or decreasing the price by a 1-3p is quite material and likely to tempt a few into selling or buying.
I'm sitting tight and rememberring all the reaasons why I bought shares here:
- The decline in share price is overdone and is currently 'priced to fail'
- Whilst hard to find direct comparisons for what MMAG may be bought for - there are some similar candidates that have sold for £50 to £150m
- The company has emerged from a challenging two years with stong H2 performance in which: (1) It reduced net debt, (2) grew EBITDA 15% in 2023, (3) Grew Revenue from Consumer Tech by 7.5% in H2 (important as this is their future - as opposed to the CDs/DVDs) and (4) Demonstrated their ability to pivot and adjust their sales mix to manage cashflow to stay comfortably within its Bank covenants.and more rectly (5) We saw new investment from a very successful local entrpreneur who took 1% at 11p in one foul swoop and followed up last week with another 0.5%.
They have not failed - they have momentum from a strong H2 and record black friday
They remain in an 'offer period'
The current share price values the business at just £10m - bargain basement. This is a good business and with a bit of tinkering and when in the hands of someone with deeper pockets it will thrive IMO.
I think there is lots more that can be done to sweat their assets, I believe there will be significant opportunity to reduce Admin costs, Interest costs are expected to come down this year. Finding just £10 per device transaction would go a long way in making MMAG ore profitable.
Nulla nuova, buona nuova
Been watching this on takeover expectations and hoped to see some fireworks but high a year ago and low this month?