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LongerGuy - It was stated in the RNS yesterday that the revolving credit facility had been terminated and that there are no credit facilities that can be drawn upon.
There’s the potential the CEO could lend the company money rather than via an equity raise with guarantees . At these share prices it doesn’t make sense for him to dilute, I’m sure there are better options.
Also people have assumed their revolving credit facility is gone, but I haven’t seen that explicitly stated has it? They were just referring to their levels of cash in the business from what I could tell.
It's hardly weeks away Teddy but I take your point that this is different this time.
They may try to do the usual pump before an equity raise. Let's face it at 3.10p it' won't need much yo shift it north
This time is different as we know an equity raise is coming. Why buy now, when a discount looks a certainty. The alternative is that the company will cease to be a going concern in a matter of weeks.
My fault sorry
It was 5p open actually.
Last time this dropped so much it picked back over the next few days but that RNS was horrendous.. Still at 3.10p this is very cheap now
It opened at 4 actually so it only needs 30% from this 3.10p to do thar..
Let's see if there is a boune but if so it may only be a deceased moggy type
A 50% gain would take it back to where it opened yesterday after the RNS.
The lesson I've learned from this (and after subsequently assessing other AIM shares) is to never invest in an IPO within the first three years of flotation, then review the share. There's a 1000-1 chance you will miss out on a huge rise, but there's infinitely more chance of you losing a significant chunk of your original investment. A valuation of £534m to a figure of £6m in two years beggars belief. Obviously the CEO and other founder have lost a fortune, but the CEO clearly still has more than sufficient funds to totally underwrite the proposed $10m raise. The financial mismanagement is staggering; almost criminal. For those looking for a gamble and an entry point, I suppose this may be it. You might get a quick 25-50% return if it bounces a bit or t/o bid emerges. Good luck with that. I'm done with this company.
Looks like Premier Minton are still involved. Surely this institutions could buy the entire company for less than their original investment :
Swedbank Robur AB 14,728,994 7.30%
Hong Kong NetEase Interactive Entertainment Limited 12,889,171 6.40%
Premier Miton Investors 9,500,000 4.70%
Crazy tor think that people who followed tip will need almost to 100 bag this stock to break even and it’s less than 3 years old: https://www.telegraph.co.uk/money/investing/stocks-shares/questor-computer-games-firms-founders-believe-shares-should/
Questor share tip: bosses at tinyBuil d have held on to 45pc of the company following its flotation – a vote of confidence in a bright future
“We went through years of hell before making any money.” So say the people behind tinyBuild on the computer games firm’s website. They finally got their reward last month when it joined Aim and its founders became millionaires many times over.
Alex Nichiporchik, chief executive, is now worth £204m as he owns 38.2pc of a company valued at £534m. His colleague Luke Burtis owns 7.1pc, worth £38m.
Their retention of such large stakes is hugely reassuring to this column, whose belief in “following the money” extends to the actions of company bosses as well as those of outside investors. But at least one fund manager has put his clients’ money behind tinyBuild too.
“We like the computer games sector: it is bigger than film and music combined,” said Jon Hudson of Premier Miton Investors, one of the largest institutional backers of tinyBuild. Questor likes the sector too: we have scored big gains with the likes of Frontier Developments, Codemasters and Team17.
And tinyBuild takes Team17’s approach: rather than developing its own games it takes on promising titles from independent developers and helps them with funding, marketing and technical expertise.
“Alex and Luke discovered the value of this model by direct personal experience: they wanted to release a game called No Time To Explain but were strung along by a publisher, jeopardising the entire project,” said Mr Hudson. “They realised they could help other developers to commercialise their games so they changed course to become a publisher.”
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Read Questor’s rules of investment before you follow our tips
The company says that since August 2013 it has formed partnerships with dozens of independent developers, acting as a publishing partner and “providing funding, knowledge, production, artwork, guidance, etc to make other developers’ games better”.
“They come at it from a developer’s point of view,” said Mr Hudson. He said tinyBuild selected just 1pc of the games it saw, picking those with the most promise and advising the developers on how to make their game more appealing to users. “It’s a partnership that works,” he said, “and this way you don’t have to commit much capital – it’s a low-risk way to generate a big hit.”
The ultimate goal is a game that can develop into a “franchise”: one that can remain popular through multiple versions, with spin-offs, books, prequels and so on.
It was a real clanger today to give notice of a raise in advance without specific details or timeframe. Renders it pretty much uninvestable in the meantime when market assumes a discount is on horizon. Every other firm raising uses an accelerated bookbuild type process to get it done and dusted as soon as possible for good reason.
LongerGuy - There could be a decent bounce in the coming days……there are still plenty of buyers around here, there have been far more buys than sells despite the terrible update.
Will have to sit tight in the coming weeks and see how things progress. Hopefully this is a massive wake up call for Alex and his team…..he’s invested heavily here himself so today has put a massive dent in his own net worth.
Hopefully Tinybuild can put 2023 behind it and steadies the ship in 2024…….
Moneyshark, I agree it wasn’t good, but I’ve seen shocking updates and companies have still bounced from a certain level (REVB was an example).
The CEO could buy this back with the pocket change he got from the initial floatation for a start.
LongerGuy - The update today was not good…..so you can understand the market reaction.
There could be a bounce in the coming days but I don’t think there will be anything meaningful until Alex and Co can stop the cash burn.
The question is where is the bottom going to be? The balance sheet was supporting the share price in my opinion and now that has been destabilised it’s a difficult company to value.
As you say there are some strong IP’s and some releases next year to be optimistic about but if they can’t sort out the cash flows and maintain the balance sheet then Tinybuild is a bit of an unknown quantity at present.
Despite the evident doom and gloom here I’m surprised there hasn’t been a bounce from these levels yet. Surely this is now worth less than the value of all the IP’s etc? It seems strange that no larger organisation has come in to snap up a chunk like Boohoo did with Revolution Beauty
404x - That would surely be a bit of crazy/risky thing to do to buy a load more shares in the cheap?
By process of elimination I would say that the CFO seems the most likely culprit of the dire situation. The company has been incinerating cash ever since his appointment and they can’t put a plug on it.
I’d also say that the aqcuisition of Versis Evil and Red Cerberus has been an absolute nightmare. The games that studio are churning out are diabolical and costly to boot. Most of their games are either garbage or pushed back putting big dents in revenue and cash flows……..the fact the founder has brought litigation against them is the icing on the cake. Lol.
Alex will have to pull a rabbit out of the hat and sharpish.,
I almost wonder if he's made a conscious decision to destroy the equity value here with a view to buying it back on the cheap. I know that's a bit of a conspiracy theory but he's been so managerially inept and complacent despite all the warning signals I'm almost inclined to believe it.
Simon, your correct. With a sizeable capitalized development spend to be depreciated over 3 years, aligned with a collapse in revenue, the prognosis is terminal .
Simon1367 - It’s easy sitting on your high horse after the horse has bolted. It’s a shame you didn’t see this coming when you bought in at £2.30 on a newspaper recommendation. Lol.
‘At the present rate, my view is that this company is going bust by this time next year.’
If it ‘goes bust’ then it’s ce la vie isn’t it? We know the score the moment we buy shares a company.
The situation is clearly pretty dire but the situation is salvageable. Today, the company remains debt free so Alex has time to turn the mess around. If the company goes down then the CEO will be going down with the ship as the largest shareholder.
TheMoneyShark: You questioned my comments last week about this company running out of cash. You said ''Why is the cash evidently going to run out given that this business has been ran debt free and in cash for at least the last 6 years?'' and that it has a big credit facility.
Well, now you have the answer. Am I surprised at the news today? No I'm not, because I saw this coming. The people running this company may know their way around a computer game, but they seem to have virtually zero business acumen. The 'Escalante' legal case adds insult to injury with millions having to be paid out. And the 'revolving credit facility' no longer exists because I'm sure the bank terminated it because of either broken covenants or they anticipated it was going to be difficult to recover any funds drawn down. And quite frankly, how long is an extra $10m fund raise going to last at this rate of cash burn?
My investment isn't worth selling. Being down 97% it's virtually worthless.
At the present rate, my view is that this company is going bust by this time next year.
Perhaps he will delist & take it private, he can afford to and won't have shareholders to bother with ?
Yes, terrible update and it explains the selling we’ve seen here for the last week or so. Very annoying when those behind the scenes have inside knowledge and start offloading before the RNS drops into the public domain.
The balance sheet has deteriorated significantly so looks like Alex is going to take the hit personally and underwrite a portion of his holding in the hope of securing $10m……
The situation isn’t looking great. Hopefully they can steady the ship and get through to next years releases which look quite promising on paper. I was going to buy more here but going to hang fire to see how things develop over the next few weeks.
The one saving grace for raise here is CEO having so much skin in the game, discounting will impact him more than it will other shareholders. Having put prospect out there out there they now need to do it as quickly as possible to stop the bleeding. Again we don't see nearly enough urgency from management but at least they're finally talking about cutting costs.
Remember when I called this company a turd and got shouted out the board... lol.
This article relating to FDEV who seemed in a similar position (albeit about 10 times the market cap of here) was interesting to read as there are potentially some parallels https://www.ii.co.uk/analysis-commentary/stockwatch-there-life-left-share-down-96-ii530003