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Devon, great point! Exactly what I am worried about
"I think the current share price is not really relevant to us, could it be that somone is interested to decresse the freefloat percentage slowly but steadily to stay under the rsdar? Would make sence since SG can not take the company off the exchange or can they?
"I think the current share price is not really relevant to us, could it be that somone is interested to decresse the freefloat percentage slowly but steadily to stay under the rsdar?"
As I mentioned the other day Huhu you are required to report any holding that goes above 3%, even if you are acting as a private individual. Its defined in all sorts of regulations and breach of it can be considered to be an unlawful act. Given the primacy of the major shareholder as both equity holder and creditor, there would be little point in trying to build an undisclosed stake as you would find it difficult to breach a point that stopped the main party reaching a critical 75% control in any battle if they chose to, and if you did, they could regain control by calling in the secured debt. Basically making the company insolvent and de-franchising it's shareholders.
"Would make sence since SG can not take the company off the exchange or can they?"
The primary shareholder, and main creditor, could in principle de-list the business at any point as it's technically in breach of it's debt covenants, so dependent on the goodwill for trading as a going concern. They could could de-list, de-franchise other shareholders easily with the confines of the Companies Act. Pearls understands that, as it happened to one of his other holdings. Pearls held equity, whilst I held secure debt that later converted in the new equity in a New Co.
Being a minority holder in a private business is a precarious place to be, I've been there in the past and found myself on the end of share consolidation, to the point that I was consolidated out of existence. I have around 80 shareholding in private businesses and it comes with similar protections to a listed company, but you might find you lack pre-emption right, drag and tag along rights, it they aren't enshrined in the Companies Article. What does that mean? Well the major shareholder can make all sorts of deals, including an exit and you don't participate. There's usually a lot less reporting as well. In answer to your question would it makes sense? Only if it does for the main shareholder, at a collective 2% you have rights, but in practical terms they are sub par to the secured creditors when a company is in breach of it's covenants.
Hope that helps.
Pearls, unfortunately not, bur what coincidence, a friend of mine (the one in the 2%) spoke exactly about this Helgoland issue some time ago.
The issue about the fakes is an essential point you mention from my point of view. Why is SG not playing this (we are relisbke and with us all stamp are approved) card more intensively. The new used watch startup here in Germany Chronext is doing exactly that
Huhu, are you also a stamp collector? I used to collect German States stamps pre the combined Germany issues of 1872 but the biggest problem is the number of fakes on the market. Areas like Heligoland are a nightmare for collectors.
I see SG has issued its Friday bulletin update, in which its selling an amazing Victorian mint collection of early GB stamps from the Shields Collection. They do sell some amazing stuff at SG.
The ?? Was ment to be a thumbs up
Sounds reasonable ??
YTD only the energy is in the green area, the same situation here, everybody waiting. Here on top of that only 10% of the Germans are trading stocks…
We as as private investors have one huge advantage compared to the fund managers though - we do not have to perform on certain dates, which becomes incressingly difficult when talking to them off the record.
Huhu, I think you'll find the marketmakers here in the UK are sitting on large unallocated amounts of shares, so when any more are sold, they cut their prices accordingly to attract buyers. At the moment, there's no buyers whilst we all await confirmation of a recovery. When / if that happens, I expect, like you, a rapid change in sentiment and the price to quickly move up. In my experience, the share rarely stays at such a low level as this for very long, added to which there are some impressively positive developments coming through that should boost the shares significantly from this level.
As ever, it depends on announcements / RNS statements, hopefully there will be something soon on the exchange they are setting up for the NFT's.
The London International Stamp Fair 2022 is on imminently at the Business Design Centre in Islington, and SG will be there in force. Hopefully staff can answer shareholders questions!
I think the current share price is not really relevant to us, could it be that somone is interested to decresse the freefloat percentage slowly but steadily to stay under the rsdar? Would make sence since SG can not take the company off the exchange or can they?
By the way the BP and Gazprom example, good point that that it is not comparable, I ment to buy a stock while nobody else does
Yikes! Down 4% today, I've always thought "share of the year" could touch 1.8 pence. This look like another step towards that.
Best avoided for the time being.
Very sensible approach Huhu, not sure I can agree SGI is comparable with BP & Gazprom, but I think you are correct about time. It can take a decades for a once fallen stock to recover, even if the underlying business recovers: investors have long memories, so it can a take a few years of beating expectations. In SGI's case there's been a history of repeated failures over decades. That wont help. Couple years more is a sensible time frame, I've said before, it's worth taking a good look at where we are in 2023 before jumping in. If it means missing out on all the recovery, it's no big deal. It' sbeen said many times before, it's not about making money when investing, it's about not losing it.
Showpiece is interesting, if they get it away, if they don't then I think you have to question the viability of SGI as a listed vehicle.
See you in 2023 or 24.
Any suggestion that Showpiece is anything less than a sparkling success I'll be dumping my holding and moving on. Hope it comes good for you.
Dear gents,
Nice diskussion, thanks for your comments. Have been a quite reader for some years now and enojoy the reading. Highly appreciated! Me and my friends are all separately invested so no issues there, but thanks for the info.
I am a danish guy living in Germany since decades and I am actually quite confident about this stock. It takes time to turn a company around, especially when in such shape as SG was from the financial perspective. Managing 6 companies (HQ in Germany) abroad and had a similar case in one of them and it took 6 years to get it healthy again. So let us give SG a couple of years. In such situation the first thing you do is to reduce salaries so no suprice the directors are not investing, the showpiece is a nice pieace of financial engineering to get the unsold pieces appraised higher which increases the ballance sheet. I am just supriced they don‘t use the strong brand to market their stamps better abroad. The Chinese blokes buy anthing when it says made in europe.
So, once they are P&L positive I expect our waiting time will be rewarded. I still remember all the negative comments I got when I bought BP, Gazprom, etc. back in 2020…..
Wish us all the best
Huhu
Oh I see HBR is down, we always get an upbeat "buy now" when HBR is down. Wasn't your other prediction that would be 800p by now?
"I and Devon have sparred over this stock for a number of years now, but I am pretty sure that when it does rally"
Yep you've been telling us it's about to rally for years now! Last year you were predicting 9p by the end of the year on £20m of sales......I was predicting 1.8-2.2p on £12m sales.
It's just another year of hopes, wishes and unsubstantiated claims.
Today we've had the 2% revelation and the questions on reporting of said position.
If your confident it's winner, don't tell people, just double down and buy.....but so far this week there's only been sellers of course! Even the bull isn't willing to buy! LOL
20million of sales! :)
I and Devon have sparred over this stock for a number of years now, but I am pretty sure that when it does rally, it will rally substantially from this level and could even hit double figures. The CEO commented recently that he sees the company soon returning to the black, this will be an absolute turnaround for the company and shareholders if they pull it off. The problem is that no-one is covering / reporting on the shares, they are under the radar of any city institution, and there was a lot of negative feeling towards the shares after the way they collapsed from over £3 a share to the current price a few years ago. Few of those shareholders remain invested in the company as a result. So there's a credibility issue which they need to overcome, but it looks like they are trading through and their renaissance could be akin to a Phoenix rising.
This could be an explosive stock later on this year if they confirm profitable trading at last.
Huhu, completely agree with your comments. I have written over the years how surprising it is that folk sell / buy tiny quantities of this share. There seem to be often trades of less than 1000 shares, at the current price of 2.5p, 1000 shares = just £25. Dealing costs alone through ii are £9.99, plus stamp duty etc - no there is no point in such trades. Presumably then these are from marketmakers playing around with small holdings to see if they can change the price?
As regards the free float level, there are 427m shares in all, of which Phoenix hold 58.09% and Lombard Odier I believe hold around 5% = 63% approx. So, 37% of the equity is in free float = 158m shares approx. No idea how many institutions hold under the 3% level, I suppose there may be some. Equally, given the current price, I don't know how much the marketmakers are sitting on, as I do not have access to a Level Two screen.
https://www.gov.uk/tax-sell-shares/investment-clubs
It appears share clubs/investment clubs have to report profits/losses to HMRC, that suggests to me that they would also be expected to make market declarations on their holding if they reach the relevant levels of holding in a line of stock.
2% coming through without the need to notify isn't something to be aware of.
SGI is a tough play. Poor liquidity and a hefty spread LOL
"10% p.a over 2-3 years cannot be taken as any guide to the future. "
Accurate or not, it only confirms that these are a much worse assets than equities, which has been the case for the last several decades.
It also suggest that the recovery here will take much, much longer than 2-3 years. If SGI's share price increased by 10% per year would if be attractive in comparison to buying 7-8% yielding assets that can be purchased at a discount? On a risk adjusted basis, with that growth, SGI looks unappealing to me.
The equity market in Germany is very underdeveloped in comparison, that's why historically Germans were big buyers of UK second hand annuities. That was my experience anyway. A group of "friends" acting in concert might be interesting. If they are holding close to the reportable holding level. It's another red flag given the poor liquidity. Pearls has already pointed out that a small, small sell trade can have a significant downside impact on the share price. It would be carnage if 2% came on the market, because of currency, legislation changes etc.
I and a friend held a large position in a mining company once, as retail investors, and contacted the regulator to ask what the implications were as we timed our trades/strategies together. As we jointly held over 3% of the company could we have been in breach of market regulations? I can't remember the outcome, but it's another thing to be aware off.
Interesting post. I've always been very concerned about liquidity. Red flags abound.
Huhu, you might want to check, if you intend to go above 3%. If it applies if your are working together. Market abuse regulations are complex, if you hold more than 3% as an individual it's reportable, at what point a group of friends might need to consider it, I'm not sure. If it's a "share club", which has a definition, then my understanding is it's potentially reportable at 3%. I may of course be completely wrong.
I would suggest that a simple statement "heard as fact" that traders' stamp prices went up 10% p.a over 2-3 years cannot be taken as any guide to the future. Where was this information obtained, and which types of stamps (early or modern, what countries, general or specialist collections or random stamps, or dozens of other variables?), were these from catalogue values, dealers' price lists , auction listings or actual deals made ?
Dear Gents,
Having this stock ( ca. 1 Mio. Pcs. ) in my depot since 3 years, I am still confident they will make the turnaround. What suprices me are the small lots being traded. Here in Germany the trade fees (min. 10 Euros) would make all those small trades obsolete. How dies this work in the UK. What percentage of the shares are really in free float? It can’t be that many. Together wit 2 friends of mine we have 2%.
What I hear here is the fact that on the stamp trader level (no retail) the stamp prices went up by 10% minimum per year over the last 2-3 years.
Best regards
Huhu
80 days left to buy a BG piece....what happens after that?
08-Feb-22 10:37:30 2.39 25,000 Sell* 2.30 2.60 597.50
08-Feb-22 10:28:57 2.394 20,470 Sell* 2.30 2.60 490.05
.........maybe you need to invest in some new glasses?
LOL
Actually today's trades are both buys. You need to have more patience, Devon.
Nothing but sellers so far this week. Even Pearls has given up on "share of the year".
You'd think if you believed that you'd be leveling down again for the umpteen time!
Carpediem - I see your point about coins being more attractive than stamps for kids, such as the chance to find interesting ones in everyday change. My own interest in stamps started as a kid, in soaking off stamps from everyday mail received at home and from my Dad's work. There's far fewer letters nowdays, few carry stamps and postal use of commemorative
stamps is negligible. The cost of a single mint set from Royal Mail isn't pocket money, and the old sixpenny and shilling mixed packets are long gone.
I just don't see fractions as an enticing way to collect. You own one eighty thousandth of something which has a contrived value determined by SGI, which cannot be sold or traded (yet).
On coins, these are much more appealing to youngsters than stamps. They can look through their change and find collectable 50p and £2 coins. Hopefully some kids will become serious collectors in later years. In stamps the only communications I get are people wanting to sell.