The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen 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.
I certainly agree that Reid did not inherit a lot to work with.
I'm also not against this sort if incentives. Quite the opposite.
I just wished that for once we, existing investors, get considered first. A higher strike price or at least tying these options to some kind of performance metrics would be enough. Something along the lines: has delivered additional 200MW at MeyGen until X.
Anything that ensures we all see some returns and not just those with an average of 1.15p ..
Evening Mr T
Regarding grants I am sitting on the fence at the moment.
When Graham Reid took over he inherited nothing but debt no credit line a large workforce and very little turnover.
“IF” the board has managed or manages to turn that around and indeed the Market cap and SP then he will become hot property for many other companies and SAE will do well to keep him.
With out a doubt it could also go the opposite way so waiting to see what happens this year.
Looking forward to next week with planning and possibly news on what deal the company has agreed with Enso energy which I hope will be the catalyst for the above.
Have a pleasant weekend chaps 👍
Thanks OT.
May I ask you.. what is your opinion on those grants? I know you would have shared your thoughts if you wanted to, but I'm curious.
Again: Seeing them grant themselves bonuses that we have to pay for at the lowest price ever recorded in the history of the company does not feel appropriate to me. Especially since these grants end up being 15% of the company. Imo last year's grant was already a leap of faith. Providing such a ridiculously low strike-price may primarily motivate management so sell their shares asap. I'd much rather see them successfully increase the value of the company first, and then collect their reward instead of providing them these kinds of bonuses in the current setting..
> The general role of thumb under the circumstances is that they would not be allowed to sell them for at least one year.
The shares of their last grant vest over the next three years iirc.
> What I'm struggling to understand is if there are a few of us here with a few hundred k of shares and we've all been averaging down. Why has this SP remained stagnant?
This is not easy to answer. There's many reason why the share price would go down. One of them is good old dilution. Over the past years, said management has had many grants. I don't know how big those were but the last two make up 15% of the companies shared issued.
Now, as these shares vest, they are offered to the market and somebody, don't ask me who, buys them. Bear in mind, that those shares offered are already going to be cheaper. Why? Because that's how shares work of course. The more shares there are, the less a single share is worth.
In other words: Whenever one of us averages down, we are, among other things, paying for these grants/bonuses. Literally paying for part of management's salaries which is why these particularly large grants are a thorn in my eye.
Another big factor then is, of course, demand and supply. Simple as that. If people sell shares, they name a price, and they'll always ask for as much as they can. However, they can only ask for so much somebody is willing to pay. A simple market.
> Do we think these shares are kept artificially low for some reason?
Maybe..? If I was management and had some good news to share, then I'd wait until I have my grants - for example. I am not accusing current management of doing that, because it is illegal, but there is some control that it in the grey zone.
The BESS planning committe meets on Wednesday, 10th January, 2024 10.00 am. Just a few days after management has granted themselves a huge chunk of shares.
Coincidence? Maybe? Did they have any control or say over this? I don't know. Also maybe.
But even if not: The company has performed abysmal on the stock market so far. Leaving every single one deep red. So.. is it appropriate to grant management a huge amount of shares in this case? Based on what performance? Did we see an increment in revenue (not couting the one-time payment of course)? Did we see any value increment? All we saw was selling assets. ATES, Uskmouth..
Did they do a good job? I don't know. Maybe. Do I feel that the grant last year should suffice? Absolutely. Am I convinced that another big grant is appropriate? Not so much.. all I am afraid now is that they sell their options the moment they vest because it's not unlikely that SAE might see a rise in valuation.
Again: It is us existing investors who pay for these grants. It is our money. Yours and mine. It is my opinion, that we have paid enough already and that it's time that we see some returns, or at least break even, before management grants themselves new shares at the (almost) lowest price ever recorded in th
Thank you @oldtramp for the really good news ✌️
Agreed. What I'm struggling to understand is if there are a few of us here with a few hundred k of shares and we've all been averaging down. Why has this SP remained stagnant? The only folk that can manipulate the trade therefore have influence on the SP in either direction are the MM'S and the II's. (Possibly PI's if you have enough leverage). Do we think these shares are kept artificially low for some reason? If so what could that reason be?
Just a novice trying to understand if I was an expert I wouldn't of been here in the first place 🤣
👍👍👍
This might cheer you up chaps
On the 10th of January Newport planning committee meet.
On the Agenda is the passing of Phase 2 of the BESS project at Uskmouth the Recommendation is PASSING with RECOMMENDATIONS
Meeting
https://democracy.newport.gov.uk/ieListDocuments.aspx?CId=132&MId=8421&Ver=4&LLL=0
Agenda
Uskmouth from page 15
https://democracy.newport.gov.uk/documents/g8411/Public%20reports%20pack%2010th-Jan-2024%2010.00%20Planning%20Committee.pdf?T=10&LLL=0
I do not think for one minute that a few people on this board have the impact of lowering the SP if that were the case then this SP would be through the roof.
Please get with reality, do you really think that investors are going to be and sell based on 3-4 people giving views on here.
Really?
Why don't you and others on here copy MTs letter and all send to sae and Sean Parsons?
Power by numbers.
The general role of thumb under the circumstances is that they would not be allowed to sell them for at least one year.
> I think all this chat regarding The employees and directors having shares given to them is talking the share price down.
Or it's the fact that management literally takes 15% of YOUR investment away over the next few years?
These grants are diluting shareholders.
The company has a market valuation of £10m. That is barely it's booking value. The company has barely any revenue and over 90% of investors are retailers.
I am not envious. I do believe people need financial incentives. However, Graham Reid, as an example, already has a base salary of £290,000. That's not too bad for a company of 20 people. Then, they've already granted themselves around 7% of the company last year at a strike price of 1.15p. That is, if the company ever reaches 11.5p, already a nice bonus for them of around £400,000 to £500,000. Also not too bad. Still, the company won't be worth much, should this ever happen. A market cap of £100m..
So now.. would they sell their shares or keep them? It's already a nive bonus .. but it can be more if the company had a higher valuation, right?
Again .. my biggest fear now is that they grab shares, pump the valuation of the company up as high as they can and then sell their shares back to the market causing the price to drop. And all that before the stock even reaches 10p.
What is happening now has the potential to make the current management millionairs without any of es break even at all. That is the danger that I see as they gift themselve large grants like that at a strike price that is at current levels.
Please think about this.
I agree, of course, it’s shocking when you have paid so much for a share that has dropped to such a low-level. Believe me I’m in the same situation with a couple of other shares. However, I do believe that there is a lot of mileage in this one, I think I could see 5p within a year. If you are brave enough and have the funds you might want to level down. I have done it myself and been able to come out with my initial investment as well as the second investment. It’s a risk like everything else.
“1.4 share price isn’t too bad”….except for those who paid nearly 30p a few years ago.
I think all this chat regarding The employees and directors having shares given to them is talking the share price down. Surely the more skin they have in the game, the better the performance and eagerness to make things even more successful. Having said that, looking at the share price today, it’s balancing around 1.4 which isn’t too bad.
If no response is forthcoming, you could forward it on to Sean Parsons, Director of External Communications at the following email address:
sean.parsons@saerenewables.com
Hope this helps.
Thank you 🙂👍
Will update when or if I get a reply.
Did you send the same content with an explanation? Would love to know what they answer.
I'm quite sure they can provide one and that they'll repeat the fact that they want to incentivise management..
I'm not sure if any answer can make me happy at this point...
Done
I sent it via the contact form on their website.
What email did you send it to?
I am sure there are enough people on here to resend it to gather some momentum.
I messed up.
I created a separate email-address for this email in order to remain anonymous.
However, now after checking if I got an answer from Simec, the site is now asking me to confirm my identity using a code they sent me via SMS.
The problem: I didn't give a valid number. That means I am now effectively locked out of said email-account. Unable to check whether or not and what SAE writes back..
Keltickilla may I point out to you that they did a switcheroo here?
Basically, they decided that the company is now worth so little, it's better to give away their old options and switch them for better once. Let's say... a strike-price of 1.15p?
Wouldn't it be nice if we all could just grant ourselves a much lower average? I am at 4.5p and I have to pay for this with hard earned money.
Seeing management making such a move TWICE within 12 months is too much.
How did they earn this? How does this match with the stocks performance? How is this in our interest?
I was able to accept the first grant which was already over 7% of the company.
Management is already in the green. They already see +20% in return as their strike price sits at 1.15p. Should management achieve a share price of 11.5p, then the'll receive a nice bonus of £300,000 to £500,000 already.
That's pretty neat and should be enough incentive imo to work towards this and hopefully even more some day.
However, all I see and fear now is them taking 15% of the company, waiting for some proper valuation in their perspective, only to sell their stock right back to us.
Yes, I want them to have an incentive to increase the value of the company, but with a strike price at 1.15p and now another at 1.5p, still down 99% since their IPO, how is this justifiable in front of existing investors?
Imo the simple solution here would have been to set a higher strike price. Their grants are not even tied to any other performance metrics whatsoever..
Let's just see where this SP goes and hold out on judgement. I'm giving them until the 3rd quarter to show big moves within the company before I rage. I think we all know the SP is way underrated by now, and with all the good news and moves since the big drop out, it seems that this share is being held back in some shape it form. It's financing issues are less, it's USK prospects since the call in, have improved and it is now a more diversified business exploring opportunities at home and abroad. I feel like the business has turned a corner and not without hard work. Maybe the staff do deserve their rewards when looking at the business just 3yrs ago to what it is now. I'm holding back on judgement. I will be interested in their response to the very well written letter though.