Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Further to my message, the sector index has fallen today, however SSIT, is the leading equity riser, which is a sign of relative strength. This fact, was what drew my attention to Seraphim.
Cup and handle price formation , three weeks for cup, and five weeks for handle, so measurable price target is 41.5.
Two volume inversions , together with highest volume , for a year, which validates the current bullish breakout , from the handle pattern. Overhead supply , from previous trading at 43. Volatility, is low as confirmed by a recent price bar, which encompassed most of the range between the two Bollinger bands, so increased volatility, can be expected to supercharge the current sp, breakout.
Thanks - sounds plausible. Liquidity does seem to be a major factor here. Average volume has been in the low 100k's for a while & it only took £1m or so of share repurchases to take the share price back to the high 40's so can only imagine what impact a larger volume of buying combined with lower selling activity will have. Given the cash is likely to only last 12 -18 months (and dilution of holdings becomes a real risk), the wildcard here seems to be how quickly and how much interest rates are lowered (and where the end up holding). If they settle at a rate of 2-3ish%, is the trust still going to be trading at a discount & unable to capital raise?
There's many other investment trusts in a similar position, e.g. AUGM, CHRY, HGEN. In general now that cash interest rates are very high the risk premium for these growth capital trusts is considered too high. Add to this the fact that many investors are keeping money in cash liquidity is low so sellers out weigh buyers leading to a reduced share price. I'm sitting on huge unrealised loses expecting the shares to rise sharply when central banks start reducing base rates. Unfortunatley my proportional costs are too high to buy anymore to average down. If you've done your research and are confident that the discount is wrong then you know what to do.
I just don't understand how the market is valuing this trust. Even if the valuation methods are optimistic, at least 40p (and arguably more) of the NAV is in companies showing clear signs of strong revenue growth and momentum in their respective markets - particularly those with dual use technologies benefitting from the cash flooding the defence space. Add another 15p of cash and you're probably about where the price should be in a risk-off environment. Anyone have any insight to what is driving the price so low (and why there are no buyers)? There are significantly riskier investment trusts out there (e.g. corporate real estate) with debt, no cash and massive demand for redemptions with a discount nowhere near as high as Seraphim.
The share price action in the first few hours this morning suggests either a) apathy or b) no consensus as to whether this is a positive or a negative. But we should remember that the directors are bound by law to do what is in the best interest of the company.
Potentially ........ This sounds similar to the Agronomics (ANIC) situation. A kind of parallel private fund was created loosely attached to ANIC by common shareholders (mostly insiders, their friends, and a few institutions) that invests alongside ANIC in the same portfolio companies. It smacks of "well we got that wrong so let's start afresh but we'll abandon those pesky small fry while we're at it).
What you have then is a situation whereby the original fund and the new fund have the same major shareholders and these two funds kind of pool their resources so one tags along with the other, The beauty of the new fund is that it's not encumbered with the risks of the original fund (we are not invited to the party), but on the upside, it gives the original fund a little more power. Meaning, in the case of ANIC, Jim Mellon and the Board make the decision for both the new and old funds.
I was thinking of averaging down if it got to the 20's again, having just my initial investment at 104ish.
I'll see what comes of the news you've mentioned first, but really unsure myself what to make of it all really like you say....what's been good or bad news regarding this share
The problem is that I'm not sure what's good news or bad news anymore.
MEDIA-Space investor Seraphim explores capital-raise after share slump - Sky News
NAV 92p
Top 10% Portfolio companies performing well.
Political and environmental tailwinds and economic headwinds both persist pushing the business forward and pulling it back simultaneously. One thing is for sure - the tailwinds will remain after the headwinds are gone.
No new fund raise until conditions improve,.
Overall upbeat tone.
Where is this dropping too? No reason for the continued fall when the nett assets are near £1.
Many small funds seem to be heavily discounted 😞
Thank you Run1,
An improvement will be welcome- I am only 54% down....
Overall an upbeat RNS clearly signalling an improved performance ahead.
UnicornHunter, I believe one of the benefits of buybacks is to provide liquidity in the market, so SSIT are the buyer helping any sellers. "The Market" likes this so the share price goes up. I think that's why they are buying back daily, similar to other trusts I own.
Anyone know what the idea is in then buying shares each day instead of once a week or whatever? Be costing them a fortune in rns'.
Can only be a good sign the shares they are buying back though?
Let's hope that this is the start of the long plod up to NAV/share. It's reasonable to expect NAV to increase too with inflation easing, north of 80p in 12 months?
A tender offer - that would've been nice! It's still early days, I accept, but if the massive discount persists, they'll eventually have to do something major to fix it... even a continuation vote.
When I first read the RNS I thought it meant they were planning a tender offer, wishful thinking. They are not even committing to buybacks, just setting up the facility to so do like I think all other investment companies do. They've got £35m to spend and listening to the Edison interview (thanks for the link unhooked) it's been allocated, so not going on buybacks.
The good news from the RNS and the interview is that at least 6 out of 7 portfolio companies have completed funding rounds at or higher than previous valuations, maybe 10 out of 11. This seems to suggest that the NAV is going to be maintained or increased, hopefully not more that 8% when the catch up and performance fee are triggered.
I wonder if the market makers misread the RNS too as well as some watch list investors which then got the day traders and algorithms excited.
I'm overweight by cost in this IT, I think there's a great story and potential here, Seraphim are doing all they can to educate the market (interviews, newsletter, podcast). I'm hopeful that once the market turns the sp will rocket back to a premium and it'll be business as usual. Anyone buying and holding at these prices are probably going to make a lot of money.
Of course the elephant in the room is the NAV. The massive (70%!) discount tells us that the market has been seriously questioning the apparent resilience of the NAV over what has been generally a dreadful period for growth stocks. FWIW, Seraphim’s Mark Boggett addresses the issue directly in this interview from 2 days ago:
https://www.youtube.com/watch?v=iiRK2Mw4jio
At least this buyback shows they have the confidence to put their money where their mouth is, but I suspect there isn't much cash lying around so it remains to be seen how far they utilise it. As a holder, today's a good day, but I do wonder if this turns out to be more a PR stunt than a reality...
Crocqman, there's also the Generation Space podcast on Spotify and probably other platforms.
Yes, and Spire Global, one of the public companies that SSIT invested in (NYSE), was up 12,50% yesterday which also bodes well. My guess is that this shows how sensitive the valuations are to forecasted interest rates.
Let's hope so. A good update this morning.
I bought in at the IPO and cannot justify adding further even at the low. One for the long term, for sure, so although disappointing to date, not a huge concern.
I must confess to not paying too much attention here of late and did not even know that they had started releasing a monthly newsletter. Plenty of reading for later now I have seen these going back 5 months!
Good luck
Has to be good news for long-suffering holders, as this morning's 20% rise attests.