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... are we being shafted again or what?
I first bought into this share just over 5 years ago now, and I'm now about 85% down again.
After this am I going to be in an even worse position?
One thing I think we can say with certain now is that the Edelman blog was absolutely correct about zango.
This company has never made a penny in profit since then.
And we've been played with ever since IMVHO.
Whether they feel a "rush" to pile in depends on why they're doing it I suppose:
o Want to influence the terms of the deal from the Tap side before it is finalised (big rush)
o Want to support the Tap price to make the deal look more attractive to R1 shareholders (less of a rush but might need to be prepared to buy chunks as and when Tap shareholders want to sell)
o Think the Tap price is a bargain now and will jump as market understands potential of a deal (rush)
o Want to avoid too much dilution by building material Tap position before completion (plenty of time, but maybe best opportunity is now when some Tap shareholders are prepared to sell down on the bounce)
R1 first stated their intention to offer a deal for Yume in early September 2018 and the deal concluded in early February 2018.
So, no rush for Tosca to start piling in just yet surely?
If Tosca exerted buying pressure on TAP, causing the price to rise, it would also drag the value of RTHM with it. Double win.
Toscafund made a dealing declaration on Taptica today, saying they had a 1.5% position (1,055,500 shares) and had bought 455,500 shares on 31st January.
Dealing declarations have to be made every day, by 3:30pm following the day of dealing, whereas opening position declarations don't have to be made for 10 business days - so Toscafund don't have to declare their R1 position for some time unless they buy or sell R1 shares.
Something to keep an eye on. Are Toscafund looking to reduce eventual dilution upon completion of any merger or are they looking to build a position in the near-term that could influence the terms of the deal? It will be very interesting to see if they continue to buy Tap aggressively.
STT- I see it didn’t take you long to make plenty of friends on the Taptica BB here on LSE and ADVFN threads.
Amazing how quickly the Taptica shareholders are sussing you out !
Just remember, regardless of how factual your constant negativity and repetitive posts maybe, people do question YOUR MOTIVE first and foremost rather than what information you pass on.
You have been doing this for years on R1 and it seems now starting on Taptica and the prospect of the merger.
Just a little advice for you in case you ever wanted to amend your ways. I however doubt that you ever will, UNLESS of course you decide to close your SHORT position, in which case I am sure your tune will change accordingly.
Eddie
I wouldn’t read this one STT if I were you; might break you spirit.
Record Q4 results for Facebook surpassing analysts expectations (including STT’s seemingly)
https://www.google.com/amp/s/www.cnbc.com/amp/2019/01/30/facebook-earnings-q4-2018.html
Good call makes a lot of sense that this current offer might have been the proposition before the TAP sp crash. If the offer was made public a month or so ago R1 holders would have jumped on the chance at that time and combined with trading updates the sp would have rocketed. Now it really does look like R1 holders are losing out by accepting a dilution on a company with a smaller market cap.
It would have been better if R1 acquired Taptica IMO.
1GW, I guess we are all hoping than when/if an offer is formally presented it will be an improvement on that currently published. Thanks for summing up your thoughts. Always well considered presented.
stt1, I would prefer that you do not reply to any of my posts. Whereas I sense that you are a lonely person needing the daily attention that posting on bulletin board provides for you, I personally, find you obnoxious in the extreme.
FB certainly contributed to the fall in the share price. Whether the data miss use affects Tap indirectly via FB loosing customers who knows. But the figures show that Tap was not affected financially and have continued to grow. This is then obviously a bad thing for holders a year ago, but it is now a good thing for new investors as the sp went 2/3rds lower. Obviously there are other factors to consider such as bod sells and ceo leaving.
So the company has had 3 major reasons that have dropped the sp yet it continues to grow financially, organically and via M&A.
Due to these reasons Tap is now trading at a forecast PE of 5 and approx 10PE of latest results. Tap has historical average of 13 times PE, and therefore makes it cheap in its sector and under valued.
All this is irrelevant though as the main question asked should be, "Is this a good merger or not?"
This is a hard question for simple pi's as they do not know what is in change. My guess is it would be a good move. It would allow for selling across flat forms and reduction in operating costs. Certainly not my area of expertise though. My current target of Tap is a 90%-100% increase of sp from my position where i will re-evaluate my position especially if the merger does go through.
Radium,
Maybe TAP announced their buy back in the hope the sp would increase beyond the level it did, approx 225p, so mcap approx £150m??
42Trader,
"Tap has been falling in sp since January 2018. This has been primarily imo from bod selling at 450p and then more recently the CEO resigning due to previous form in another company.
FB may well of affect the sp too as often bad news within a sector can influence the sp across the board such as is happening in retail atm. "
Thank you for your comments on TAP... I didn't know the BoD were selling at 450p.
Yes, exactly, sector/industry bad news can influence the sp across the board, which is why I follow industry newsflow and industry challenges. Google exec's comments on GDPR, California Privacy Law and Apple's ITP are just one such news which could affect other plays within the sector.
https://adexchanger.com/industry-events/fallout-from-apple-itp-is-severe-and-seven-other-takeaways-from-google-exec-sean-downey-at-industry-preview/
Tardis,
"'FB suffered due to Data Misuse last year and as a result TAP suffered'
Please back this statement up STT. Or is it lies?"
Were you asleep when the Facebook/Cambridge Analytics Data Breach was made public last March?
https://www.theguardian.com/technology/2018/mar/19/no-10-very-concerned-over-facebook-data-breach-by-cambridge-analytica
The TAP share price fell from approx 400p to approx 300p following the Facebook news.
https://www.theguardian.com/technology/2018/mar/19/no-10-very-concerned-over-facebook-data-breach-by-cambridge-analytica
Radium, the reason why 16/19 works in terms of the shares in issue is that they have designed it so that it is a 50:50 merger (each company ending up with broadly 50% of the merged entity) - so you have to factor down for the greater number of shares in issue of Rthm.
But 50:50 is a consequence of the valuation negotiation, it is not the reason why the ratio should be 16/19.
The most obvious reason why Rthm shareholders might expect more than 16/19 is because of market caps ahead of the leak of the M&A talks. Rthm was worth more than Tap in market cap and so Rthm would expect to end up with more of the merged company, if it were a genuine "merger of equals" with no side getting "control" and a broadly equal split of key board and management positions. Then if Tap is seen as the acquirer and is getting key board positions then you would expect Tap to pay a premium to Rthm shareholders for that control.
Personally I think the 16/19 ratio was negotiated based on market caps ahead of the December 4th crash. So when Tap was over £3/share and Rthm was under £2/share. 16/19 x £3 = £2.52, which would have suggested a 25%-30% premium to Rthm shareholders which could be considered reasonable for ceding control.
Tap have doubtlessly been arguing that the fall in Tap shareprice was a temporary "mispricing" due to the CEO leaving and then the uncertainty over why the share buyback had been stopped. So Tap would have been arguing that the ratio agreed before the crash should stand and reflected "fair value" of the 2 companies. Rthm will have been arguing that the ratio should be rebased to take account in the fall in Tap market cap.
Given we haven't had an actual recommended offer rns yet, my guess is that negotiations are continuing to try to reach agreement on an offer that the Rthm board feels it can recommend to Rthm shareholders. Given that the Tap shareprice has not recovered to anything like £3, even though the market now knows that there were genuine M&A negotiations going on which would have justified the pause in the Tap buyback, I would guess that the Rthm board will be holding out for an improved offer which reflects a premium for control, or else restructure the deal so that Rthm gets control and key positions in the merged company.
Thanks for posting Radium. Very interesting and explains the 16 for 19.
I agree that Tap is better valued particularly on the face that Tap has been steadily increasing profits year on year.
The interesting thing about R1 is the forward earnings for the next 2 years are set to grow exponentially as are the profits. The risk would be, can they create that profit? Potentially I think R1 can give as good a return as Tap, but Tap is a safer play.
First of, I don't like posting about other firms on other boards but there is a genuine interest here.
I don't know everything about tap as I have only been watching it for 3/4 months and only bought into 2 weeks ago.
Fundamentally TAP are in excellent shape growing their revenues, profits and cash each year as well as a dividend.
The share passes 4 screen tests which includes Greenblatt's Magic Formula for which it scores the highest possible A+.
It has a low PE and F/PE and the next two years are expected to grow revenues and profit faster.
Tap has been falling in sp since January 2018. This has been primarily imo from bod selling at 450p and then more recently the CEO resigning due to previous form in another company.
FB may well of affect the sp too as often bad news within a sector can influence the sp across the board such as is happening in retail atm. Tap have insisted that the data miss use in FB does not affect them in anyway and they do not deal in selling on data. The increased revenues and profits indicate FB has not affected them.
About a year ago Tap did a placing of approx £22m which was solely used to pay of debt from buying out Tremor.
Technically tap is in a good position.
The weekly chart shows Tap is over sold in STOCH and RSI. It has currently bounced of a major support line and the bottom of the downward trend line. A target of 270-290p which would likely hit the 50 day MA, top of trend line and resistance line.
http://www.chartupload.com/viewer.php?file=44351846730966092011.png
The daily chart shows Tap has moved out of the downward trend. A move back to 270-290p would likely bring the sp to touch the 200 MA as well as fill the gap created when the CEO left.
http://www.chartupload.com/viewer.php?file=79322159056382416030.png
The reason for the 16/19 ratio is based on the difference in the number of shares in issue for the two companies as stated in the RNS …the exchange ratio of 16 new Taptica shares for each 19 RhythmOne shares set out above is based on 68,521,997 Taptica shares in issue and a fully diluted share capital of RhythmOne of 80,947,880, in each case as of 29 January 2019, being the last practicable date before release of this Announcement.
i.e. 16/19 = 0.84 and 68521997/80947880 = 0.84
Short of a very positive 3Q trading update and year end guidance from R1 can anyone see a good reason why TAP should pay a premium for R1 over and above this 16/19 ratio??
would you buy Tap?,,they both look cheap
"FB suffered due to Data Misuse last year" - By "suffered" do you mean "posted record profits"?
'TAP seem to be profitable'
Stt, you mean TAP are profitable.
'FB suffered due to Data Misuse last year and as a result TAP suffered'
Please back this statement up STT. Or is it lies?
Stevie,
I first bought rthm, as blnx, in 2011... therefore, I have more of an idea about rthm than TAP..
42Trader is a TAP holder, so hopefully he'll correct me where I am wrong..
TAP is a specialist mobile ad company.
They bought TremorDSP from Tremor (now Telaria) in 2017. They paid around 1/3 revenues... This fraction is interesting as several deals within ad tech have been around 1/3 to 1/2 revenues...
They are a FaceBook partner and have a large dependency on Facebook. FB suffered due to Data Misuse last year and as a result TAP suffered.
They lost their CEO recently - he resigned after reports that he lied about a company he sold, where he was CEO, 12 yrs ago...
Because of FB's data misuse and more recently losing their CEO their shares crashed.
I don't know if they have a history of missing expectations...I don't know about the other executives.
Perhaps 42Trader has anything to add to the above.
Tremor Video Sells Its Demand-Side Business To Taptica For $50M
https://adexchanger.com/digital-tv/tremor-video-sells-demand-side-business-taptica-50m/
The interesting point from that article is that
"Clients were also uneasy with Tremor servicing both the buy- and sell-sides."
TTD has also previously stated that it's success has been down to one side. rthm runs a full stack, which has it's own
issues..
As a mobile specialist they are ideally placed to take advantage of the mobile ad tech..
I don't know how dependant they were on FB.
Data Privacy is a big issue at the moment - GDPR, California Privacy Law...
TAP seem to be profitable.
TAP announced a $10m buy back..
Their last TU was vague - reminded me of rthm's vague TUs...Hopefully the merger document will clarify this.
I think both companies need each other, especially in this day of Data Privacy laws ...
whats your opinion of TAP?
Hi 42trader, I hadn’t read anything into your comments, I wish you and all genuine shareholders the very best of luck. People buy shares in the hope of improving their lives and those of their families, sometimes it works and sometimes it doesn’t. I must admit that having held this share since Autonomy days I will be pleased and relieved when I no longer do, but until then it’s fingers crossed. Regards