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Why did Tinybuild inc share price collapse from £2.10/share on Mar 21 to £0.32/share today, giving the company a cheap valuation of:
P/E: 7 times earnings;
CFO: 3.5 times;
Enterprise value to EBITDA: 2 times.
Click the link: https://www.linkedin.com/feed/update/urn:li:activity:7076887541651496960/
Yesterday, 4×250,000 sales went through. Will today's block of choice be 125,000.
Yeah I have to say I haven't tracked his performance at all. I always thought he came across as very smart, but that doesn't necessarily mean he's a good investor.
I do enjoy the Vox interviews, but sometimes I think that's because I'm a sucker for a good sounding 2-3 minute sound bite on a company. In reality if you prepared what you were going to say you could probably make a lot of bad companies sound good in that time. I listened to the one with Gervais Williams from Premier Miton the other day and it sounded to me like he'd chucked some cash in a load of pre-revenue companies and hoped for the best!
Interesting point ggrantsu. I hold units in the Smaller Companies Fund and it's been a poor performer for a year or two now. They do hold a fair amount of speculative stuff, but typically very small positions, so maybe that's why he doesn't seem to care? I'm not sure I'd go as far as saying he's an example of what's wrong with the industry, but he's certainly having a bad run!
I don't know what people's views are, but I find Paul Jourdan a distinctively unimpressive investor...he is always chucking money at really highly valued speculative stuff at share price highs and is not someone who can even come across as impressive in interviews. Even that video on Vox re Tinybuild...it just came across as like he had some money there but didn't really care all that much / know what was going on. He is an example of what is wrong with the industry in my view.
Okay, my post crossed with Jc's. That's settled that then. Indeed he thinks (and you agree) that they mopped up some institutional selling to 'protect' the value of their existing holding.
In the Smaller Companies factsheet for April Jourdan says he added to TBLD on price weakness. I guess that's kind of the same thing. However you look at it though, it was yet another bad Amati trade.
But worth listening to Paul Jordan's chat with Vox Markets. He seems to say that he can understand why funds were selling but is chalking it up as a school-boy error which they can learn from.
I think what's clear is we'll see if their strategy pays off in the short term. They can't sustain the huge amount of investment without some return. That return has to start coming in around about now if their $16.1m cashburn from H2 last year is repeated in H1.
https://www.voxmarkets.co.uk/articles/q-a-with-amati-global-investors-fund-manager-dr-paul-jourdan-cb09037/
Good points ggrantsu. I think you've hit the nail on the head with the red flags. I still have over 5% of my portfolio here (having dropped from 10%.) I'm tempted to de-risk a little given these red flags, though that's usually a sign it's reached the bottom (!)
On Amati, my comments were pure speculation. I don't think they would have added any more to their position but, as other fund managers were offloading, they were likely keen to help mop them up to preserve the share price somewhat.
Looking at Simply Wall St. + comparing annual reports it looks like the main seller was Premier Miton with JP Morgan and Baillie Gifford & Co. also selling some. Amati and Franklin Templeton were the buyers.
Barcap, not disagreeing with you about the performance of either Amati fund, just saying the onerous VCT rules on buying and selling the underlying stocks, make that fund in particular a no-no.
One for you (or Jc): what do you mean you think they added to their position in TBLD out of 'need rather than desire'?'
Been watching this since c.£1.20...what a performance. Many times I've been close to buying in but held off...not even sure why...certainly not because I had any special foresight.
Ultimately this now sits at probably 3x earnings...which in most cases would see me load up. However...there are just too many red flags. The people involved is something that I could get over...CEO is bold and owns a lot, something I see as a positive; but his boldness lacks a measured CFO - that was all to clear in latest update. The cash burn will continue this year...which again I could live with - and even encourage - if it was being spent on hit games and a potential investor could see that being reflected in game reviews and satisfaction levels. But there in lies the risk I just can't get over...they seem to not be hitting the spot with their new games, and they have invested heavily. Games aren't like a factory being built and not giving the expected return either...they knock the Company's reputation which is so critical here. Word of mouth in gaming world spreads like fire and the fact they now have had a few games not hit the spot really worries me.
It's for that reason I'll be staying away but will be watching everyday with intrigue to see how this plays out. Btw - my knowledge is as basic as it comes here...just my take above. For those that can do the required digging here...there is clearly a potential multi-bagger on offer. Best of luck!!!!
Unhooked
Indeed they do hold it in the Smaller Co's fund.
The point I was making was that their performance with small/micro cap companies over last few years has been more than disappointing, I don't believe they hold it in the vct but they have plenty of other poorly performers in there already, hence my remark of losing their mojo.
...therefore they don't hold TBLD in the VCT fund. They hold it (and have recently added to it) in their main smaller companies fund.
Guys, when you say "need rather than desire", why the "need"? Is it an effort to protect their existing holding from further price falls if institutions are selling?
Re Amati's recent poor performance, the problem with the VCT is that the rules to protect tax-exempt VCT status mean they are highly restricted in what they can do. For instance, they can only buy a share in an IPO or a placing and cannot re-buy a share they've sold. That's a massive problem - like having one hand tied behind your back - esp when you think of the overpriced IPOs of 2021! So, for me, not being in the lucky position of needing the tax advantages of a VCT, there are no reasons for and lots of reasons against the VCT fund.
Jc
Good point you make re Amati "need rather than desire", they certainly seem to have lost their mojo recently, in the vct as well as smaller co's fund.
Disturbing but I consider you are very likely spot on target.
Sorry to see where this is at. I was in here last year and lost out with a drop from circa 120 to 112. Regretted selling at the time as it went back up after results. The target price for the stock at the time was 200 and it was being ramped in national press.
I've just bought back in at nearly 3 times the holding I had previously. This stock is incredibly undervalued now and the fundamentals appear even better than they were last year.
Again, I'm really sorry for those who've been here a while, I know what you're going through having experienced it on far to many occasions.
There are some very knowledgable posters on here which makes for good reading. I also like to see posters that point out the potential negatives and pit falls rather than the head in the sand / endless ramping that's very prevalent on other boards.
I would caveat that however by saying that when contributors post only constant negatives (and digging) then I start to assume that they have other agendas and end up disregarding their posts completely due to the lack of any sign of balance, regardless of the quality of some of the content. Posts that are 100% negative are no more use than the happy clay ones because no situation is ever completely awful and you have to guess which data / comments are worthy of note.
Shear - I'm not sure about hand over fist, but maybe you're right - the RSI got to the 50s / 60s in April and May only for it to fall off a cliff again.
That is shocking re: Farworld Pioneers. It's a similar pattern to Hello Neighbour 2 - release the game with huge bugs but promise users you'll work hard to improve it over the next 12 months. I don't get it. Seems like a terrible plan and will just stop people from buying the games because they can't trust if it'll be good or not (until 12 months have passed, things have been fixed but by which point no one else is playing.)
That being said, it's worth placing this and Hello Neighbour 2 in the context of their other releases and broader approach (to develop, own and release a 'catalogue' of games which results in less reliance on individual titles as you might see at FDEV.) Their overall catalogue is pretty well-rated and not overly dissimilar to TM17 - albeit the latter has some bigger titles (including Hell Let Loose which they bought.) My hope is that TBLD has a hit over the next 6 months. I have some hopes for FEROCIOUS, Sand and Bookwalker (the latter coming on 22 June so we'll find out about that soon.)
https://steamdb.info/publisher/tinyBuild/
https://steamdb.info/publisher/Team17/
https://www.tinybuild.com/single-post/tinybuild-s-non-e3-round-up
I reckon Amati added to their position out of need rather than desire - buying shares off institutions that were dumping. Paul Jordan suggested the fix was pretty easy - basically do what they said they'll do - release the games which have had increased development, make some profits and return to a decent cash position (forecast to get back to $26.5m following more development costs in H1.)
CEO appears to be an enthusiastic, maverick 'gamer', but possibly not schooled in the world of business or running a company.
Unaudited Results for the year ended 31 December 2022 had cash significantly down, but still at $26.5m Simon. Still a fair amount, no?
Amati Smaller Companies were recently topping up their holding in Tinybuild, according to the April factsheet. Whoops.
I almost pulled the trigger after Friday's fall... obviously glad I didn't now. I really want to buy this share and hold for a recovery, but an unexplained drop of this size makes me nervous.
This is ridiculous. And concerning. We already knew Burtis was on his way out. There's nothing to indicate he's sold shares yet.
Jc1220 : I agree. The market has been spooked by resolution 5, to be taken forward at the AGM. The company says it nevertheless does not have any intention at this point of raising capital in this way. My answer to that is .....cobblers. Its likely they will need to raise more capital fairly soon, so will that further dilute the sp?
I beleive the CEO is exremely knowlegible in his field, but I'm not convinced about his 'business acumen' and the people around him. I was not impressed by the live online update a few months back. It was all too laid back.
I'm releuctant to throw more money at this. However the last financials looked reasonable, and the price looks a bargain. What am I missing?
JC, PI's have been buying this hand over fist since it dropped 30% in Feb, particularly after the disgraceful pumping it got in the Times a couple of months ago & via the CEO using paid twitter posts to claim it was the most undervalued gaming co. around. It's now fallen a further 30% since the 7th June concert party RNS which announced Luke Burtis was free to do as he pleased. Judging by the share price movement it's not hard to guess what he's doing with his 14.2m shareholding.
Ps. their latest game 'Farworld Pioneers' looks to be a disaster; https://store.steampowered.com/app/1363900/Farworld_Pioneers/
Comments always to be taken with a pinch of salt, however this one would be fairly damning if anywhere near true;
"I worked on this game. So obviously I will recommend it. But with a private note... When I worked on it there was a known bug involving the AI pathing. Nearly two years after I left the team, at the 1.0 release - that bug remained unsolved. Take from this what you will."
37% positive reviews from 12k steam downloads is about as bad as I've seen.
I think the drop last week was due to the AGM statement and the company asking permission to undertake a share placing for acquisitions. I think Luke Burtis leaving was known news.
Really poor movement in the share price today. It seems that institutions and retail investors have been selling this since January with no credible reassurance from the company to buck the trend / encourage buyers. Vox Markets recent interview with Paul Jordan of Amati suggested institutions were spooked by a sudden increase in R&D spend on new games. This, combined with COO and co-founder leaving + the CEO being a young entrepreneurial maverick + poor macroeconomic situation + poor release of the latest big game (Hell Neighbour 2) = tricky times.
I'm holding against my better judgment thanks to what looks like a solid games pipeline, and some trust in the CEO. He clearly acts with integrity, but it's his control of the business which is a credible cause for concern.
Aha, now down to 33p... chickens are coming home to roost here.
CFO may not be allowed for whatever criteria they may have for buying shares. The valuation is just nuts vs TM17 who's founder Debbie Bestwick is stepping down from her role to be with kids
I see this has started falling again after yesterday's announcement regarding Luke Burtis no longer being part of the 'concert party', was this the trigger for him starting to sell down his holding? Answers on a postcard as always with these lot. Ps. I see from the annual accounts that both the CEO & CFO were awarded €135k bonuses last year, however despite this the CFO continues to hold ZERO shares. If it's so undervalued you'd think he'd use even 20% of the net proceeds to buy some shares?
Maybe, Simon...maybe not!
'So where, then, is our Apple, our Google, our OpenAI?
How long before Darktrace gets swallowed by a bigger fish?
https://www.bbc.co.uk/news/technology-65400612