The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
yes, I lean toward 2... I think it's rushed through because of excessive cost cutting..
Sept 25th CFO resigns with 'immediate effect'..
Nov New NOMAD
Nov New Advisor - Whitman Howard.. aren't they Tosca's private broker/banker??? Their previous reports have been very favourably, especially as Tosca are the largest shareholder... yet they have been completely wrong...
Nov - long running FTI dropped in favour of internal contact...
Numis, who were rthn's long time broker dropped...
Now yet another CFO leaving today... that's 3 CEOs and 3 CFOs in last 18months...
the company has warned about significant and additional costs...
20-F filing by RTHM...
- Page 13:
"In particular, Europe's new General Data Protection Regulation ("GDPR") (which came into force in May 2018) extends the jurisdictional scope of European data protection law. As a result, RhythmOne IS subject to the GDPR when it provides its targeting services in Europe. The GDPR imposes stricter data protection requirements that may necessitate changes to RhythmOne's services and business practices. Potential penalties for non-compliance with the GDPR include administrative fines of up to 4% of annual worldwide turnover. Complying with any new regulatory requirements HAS resulted in increased costs and could force RhythmOne to incur further substantial costs or require RhythmOne to change its business practices in a manner that could reduce its revenue or compromise its ability to effectively pursue its growth strategy."
"Evolving definitions of personal data within the EU, the United States and elsewhere, especially relating to the classification of IP addresses, machine or device identifiers, geo-location data and other such information, may cause RhythmOne to change RhythmOne's business practices, diminish the quality of RhythmOne's data and the value of RhythmOne's solution, and hamper RhythmOne's ability to expand its offerings into the EU or other jurisdictions outside of the United States. RhythmOne's failure to comply with evolving interpretations of applicable laws and regulations, or to adequately protect personal data, could result in enforcement action against RhythmOne or reputational harm, which could have a material adverse impact on RhythmOne's business, financial condition and results of operations."
https://www.sec.gov/Archives/edgar/data/1713721/000143774918014094/rhyth20180713_20f.htm
so what is the net cash figure being transferred to TAP?
Now 2 months out when the company stated they are growing cash by $1m a week is a pretty large difference...
you can't answer it, can you? The company isn't being transparent when it comes to it's cash position, is it?
Is that deceit or incompetence by rthm?
Given the confidentiality agreement was dated 15th August, it seems pretty clear (to me) that initial deal discussions would have been based on a Tap shareprice above £3, which on the final terms would have meant a good premium to R1 holders.
Given the implied discount to R1 holders based on shareprices immediately before the leak of the indicative 16:19 terms, I think there are at least 2 possible conclusions, to suit bull and bear tendencies respectively:
1. R1 board accept that the pre-leak Tap shareprice was "artificially" depressed because of the CEO resigning, the halt to the share buyback and the inability of Tap to communicate effectively during the closed period created by merger discussions; or
2. R1 board is desperate to close any deal before the wheels come off (exposing perhaps the folly of excessive cost-cutting) and this one's good enough, even at a discount, given the potential for cost and revenue synergies.
Now I lean towards explanation 1 and I think I can guess one poster in particular who might lean towards explanation 2.
It will be interesting to see how the brokers write the deal up.
Remember, even with what I feel is an aggressive timetable, we're going to have several weeks before the R1 shareholder vote. Plenty of time for the Tap shareprice to rebase itself to a level which looks past the travails of the period between the CEO resignation and today's announcement and looks forward to the likely financials and success of the merged company.
graham wales, for the avoidance of doubt I am saying that R1 has been perfectly clear in its communications on cash, stating each time whether it is talking about cash or net cash.
I am further saying that this isn't the first time stt1/stt has quoted the wrong number (cash instead of net cash or vv). Now would you put that down to incompetence or deliberate deceit on the part of stt1/stt?
1gw,
"why they couldn't quote the 31st December or 31st January position I don't know"
That's the point.. the cash figure doesn't make sense...
rthm can't just say for the deal we'll use a cash figure which is 2 months out of date...
especially as they suggested at H1 webcast that cash was $31m and growing by $1m per week...
where's the rest of the cash?
The deal announcement also mentions the definition of rthm's net cash...
"Net Cash defined by RhythmOne as: "Net cash comprises of cash on hand and demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value in addition to marketable securities which are investments in corporate bonds, commercial papers, government bonds, collateralized securities and certificates of deposit net of borrowings under the Company's revolving credit facility."
1GW
So are you saying that from the 1st December to 13th December they generated $13 million cash rather than $13 million profit. So that $13 million cash didn't include any associated costs. What a bunch of deceiving bath plugs as you lot thought it was an increase in net cash.
This looks to me a very aggressive timetable, given the need for shareholder approval and regulatory clearances. The sharp end appears to be:
26th March: Taptica publishes full-year figures and 2018 performance review
29th March: Court Hearing
3rd April: Scheme effective date (i.e. completion)
And before the 29th March Court Hearing we have to get the Scheme Document published and have the R1 and Taptica General Meetings.
There appears to be no space in there for any further R1 trading update. I would have thought there might have been a case for getting audited accounts published for the 3 months to end-December 2018 to give R1 and Tap shareholders a view of current R1 performance. This would also help get R1 accounts into line for easy adjustment to Tap's Jan-Dec financial year. But perhaps major shareholders on both sides view this as immaterial detail.
So, what chance a delay? Could anyone else try to crash the party by making a cash or cash & paper offer above the theoretical value of the Tap paper offer? Could disgruntled US shareholders (there must be some) challenge the deal or the timetable in the US courts?
1GW, i’d Assumed they didn’t want to quote effectively numbers from a quarter end trading update which they seem not to want to give while in take over node. The end November would be ok as the $31m from the results call was already in the public domain. Surely it was legal advice based as it would make much more sense to both quote cash from the same date.
This deserves a reply as it is not the first time stt1/stt has "misunderstood" net cash vs cash.
30th September 2018: $13m net cash ($22m cash less $9m borrowings)
30th November 2018: $18m net cash [today's announcement]
xx December 2018: $31m cash [1H results call]
So firstly, net cash has clearly increased between end-1H and 30th November.
Secondly, the $31m reported on the 1H earnings call was qualified by something which sounded like "as of our latest full week cash report". Given the earnings call was on 13th December, it appears this was a later datapoint than that quoted today. I would guess they wanted to report an end-month rather than mid-month number, but why they couldn't quote the 31st December or 31st January position I don't know - perhaps R1 disclosed the end-November position to Taptica when they resumed negotiations in mid-December.
TAP are due to present full year results on March 31st...but I suppose they would only count R1 revenues from the date of the merger completion. What about R1s performance in its strongest quarter?
Does anyone know if we’re likely to get a trading update from either company in light of the merger? Wouldn’t R1s performance this past quarter need to be made public? The fabled bottom line profits never technically materialised, which I would have thought would supercharge the sp.
stt1 another RNS to put your negative spin on.
hopefully we will now go into the 250 and maybe the Nasdaq,,this deal makes sense,we deserve a bit of luck,after what weve been through the last 5 years GLA
Don't forget xmas has just gone and gifts had to be paid for.
Still a few quid kicking about.
Can anyone make sense of the cash position? The cash balance is a lot lower than they stated just 7 weeks ago...
The merger refers to rthm's net cash position of $18.22m
Whatever happened to the $31m cash and growing by $1m per week they reported in Dec 13th webcast???
rthm H1 results show cash of $22m..
https://investor.rhythmone.com/assets/pdf/FY2019_H1_Presentation_FINAL.pdf
http://webcasting.brrmedia.co.uk/broadcast/5c4ee2bfa0c50933d2710bf5
"But you would have thought 2 years to wait and get your money back or make a profit would have been long enough for the Yume deal."
absolutely.. rthm has a history of disappointing... and given it's only been a year since Yume/rthm deal completed, I think possible skeletons from the Edelman days...
I think a lot of TAP PIs don't know rthm's history and will rely on the merger deal or brokers notes.. and obviously vice versa..
I think rthm BoD NEEDED the deal and did what it took to achieve it..
If they were going to post a profit and cash was growing strongly then they would have achieved much higher price (better deal) after the fy results...Unless they thought there was a high risk of losing TAP to a competitor...
Data Privacy, GDPR, California Privacy Law and Apple's ITP may have the catalyst to get the deal done asap...
From Sept onwards for rthm:
CFO resigns with 'immediate effect'...
New NOMAD
New advisor - Whitman Howard.. aren't they Tosca's private broker/banker???
New IR - FTI gone and internal IR contact..
bullish TU in Dec..
jed , It's not fair enough , it is actually fact what the man said regarding his investment. His money his choice.
Are you invested here , or do you have any hot tips from your portfolio.
Yes fair enough but I guess it all depends on how long you want to hold and wait for.
But you would have thought 2 years to wait and get your money back or make a profit would have been long enough for the Yume deal.
Jed,
The rthm/Yume combined valuation was a lot higher than the price of the deal, so currently those shareholders are at a paper loss..
However, rthm shareholders get shares in TAP.... if TAP sp increases then the rthm shareholders may see their investments back to the yume/rthm valuation.
It's still jam tomorrow but you never know...
From,or for.....
Actuall GOOD DEAL....IMHO.
Once the merger completed I expect re-rating with steady SP recovery....as such strong HOLD fro me.
Sorry should read has traded well below.
So when they last consolidated the shares were 37p and then needed to be £3.70 to break even, this share has trdaed well below that mark for what 1-2 years between £150 - £2.00.
So with this takeover all the original investors have lost out big time and will never see their £3.70 back.
Currently 86% value so as long the deal goes ahead at 84.85% possibly worth transferring over to TAP
Any advantage in topping up here as opposed to buying Tap ?