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Been dripping down all year on nothing really... so theoretically priced in, MM's opened at low 20s so imagine it'd go back to around those levels at some point with a gap up to 33p....book value is near 60p? Probably won't reach the IPO highs of £2-£3 again though....
But IP must be worth something
All IMO
you absolutely did the right thing and rather than whinging how **** the company is you'll lose alot less as you've been very savvy. applaud this attitude, limit your losses, ride your winners. in from 8p.
I sold out on the TU at 15p and then unexpectedly found myself buying 3 times the number if shares I had sold earlier at 7.1p
There are clear red flags and this has been a disaster but the sell-off is far too extreme. I understand how it has happened and I get that previous investors want to just forget that this stock ever existed. This is however what makes it an absolute bargain. I don't see any immediate danger. I don't think it will be long before it is back at 15p at which point I will sell again.
Ginksy: You've not followed this story for long have you? This company has screwed investors. There have been far too many unanswered questions in the last few months. Too many dodgy events in the last year. Additionally, one has the creative accounting of capitalising large amount of costs, thereby achieving what is considered to be a false 'profit' , whilst eating into a large amount of cash. Consequently, unless they curtail expenditure, there will be a need for more cash within a year, as reinvested cashflow has been put into poor performimg products.
The CEO (the joint founder) has made his millions by going the IPO route a few yrears back. As for everyone else, they are basically screwed. This company is a disgrace.
Why would they run out of money , they a generating 20 million a year operating cashflow , which is reinvested to generate more games , which will generate even more income over the next few years, if cash gets tight just slow down on games development
.........Oh, and I forgot to mention, we never did find out the reason for the massive drop in the share price in March. That in itself stank of shares being dealt in in huge amounts without any RNS updates re shareholder details. All the warnings were there at the time. We live and learn.
I've been away a few days and had not looked at this. I'm now incandescent with rage. Incredibly angry. A few days ago It was 34p and now it's 9p. I had averaged down over the last few months to about 90p. I've basically written this share off, given it is virtually impossible for this share to recover significantly to recoup my money. Basically, we've been taken for mugs.
Firstly, why the hell did I listen to Questor in the Telegraph a year or two ago when the sp was over £2 ?
Secondly, why the hell didn't I go by my gut reaction a few months ago when the Tinyworld 'team' did a broadcast about their updated figures? I said on here at the time that I wasn't impressed with the presentation and said that this looked like a 'one man band'. The CFO seemed out of his depth. It was all too laid back and stank of lack of corporate governance
The only satisfaction I get is seeing that Nichoporchick has lost a massive amount of his own share value, although he (and his wife, for some reason) has taken out a lot from this company. Luke Burtis, co-founder (who has not been part of the business for quite a while) must be sick as a pig.
I've been in this situation once before. It all STINKS. In the last scenario where I lost my investment, the updates became less frequent, (but continued with a positive theme), and eventually the shares were de-listed from AIM due to delays in updating, and the company was dissolved, and the directors disappeared. I'm getting a horrible feeling of Deja Vu.
And finally, as they are going to run out of money soon, don't get conned when the rights issue comes along. My advice is to tell them to eff off.
Jumped in at 7.11p ,like the previous poster said bad companies can sometimes make you lots if you catch the bounce right ,priced less than cash so always a good chance of gains ,expect 13-18p july time
Hi all,
Hi Mortality,
Wow you know your chopsticks. I had never heard of these until I seen the 70%, and just thought I will chance 2k, thus up a few 100 now. I am on all my other stocks long termer, thus whats your game plan here. Are you hoping its going to go back up to 50, take your money out and run like hell, or do you think you could chance this firm longer, or even long term. Ho, any advice on Amte Power ??? I was thinking UK Government cant let these go under, thus was going to put 2k in for long term, but not sure yet.
Thank you.
Wayne
Agreed but you're contradicting your last 'red flag' sermon.
Anyway, good luck.
Bad companies can be good investments and vice versa.
So you invested in companies you considered 'turds' and got paid for it??
I am pretty experienced actually. Used to do this job professionally. Did it for 12 years as a UK equity analyst and later on as a European small cap portfolio manager (for a large German asset manager). Before I chucked it in to study computer science.... not that I expect you to believe me :).
Maybe I can explain some of the issues with those numbers you mentioned below... and highlight some of the major red flags.
1) Net-profit. This business capitalises ALOT of costs. In 2022 they capitalised a massive $35.8m (see cash flow statement). Basically they hide these costs as an asset on the balance sheet, and then spread them out over 7 years. The amount of costs they released through the P&L was about $10m. That means in 2022 there was c. $25m flattery (roughly) to net-profit in 2022. Net-profit was probably c. -$10m in 2022 otherwise (not the $15m claimed).
1b) Net Profit was also boosted by writing down the contigent consideration of Versus Evil and Red Ceberus acquisitions . Basically these acquisitions did so poorly they don't have to pay them. That was recognised as a $10m gain. Another artifical boost to net-profit.
2) Cash flow: Given all the funnies in the P&L, cash flow represents a better measure of earnings. The business generated $20m in operating cash flow, and spent $35m (excluding acquisitions). This tallies with roughly -$15m in losses each year. If you strip out the accounting manipulation in the P&L.
3) Book value of $112m. This is effectively $133m in assets. Of this $76m is related to the assets in point 1. Lets cut this to $30m. Add $10m net-cash. Gets you to c. $40m book value. Way less than $112m, but still well above the current market-cap. This is supportive, I agree.
Then there are all these other dodgy red flags. Some are really dodgy....
1) CFO / COO leaving pretty much immediately after each other.
2) The wifes CEO is a related party as a major holder in one the subsidiaries.
3) In 2022, TinyBuild bought a company called Bossa - the Non-exec Chairman is founder and CEO of BOSSA! I mean how dodgy is that. Imagine the CEO buying a company off the Chairman lol. What could go wrong there?
So where do we stand. $15m net-cash and a decent enough portfolio of assets.
However, I think the shares are dropping BECAUSE the market can see them running out of cash. They burnt through -$15m cash on $62m sales, if management don't take action, they will burn at least another -$15m.
As of today, the valuation looks attractive. Someone could buy the business today. Take the $15m cash, sell of the assets for at least $10m+ (implied in valuation). However, where will we be 12 months from now if this doesn't happen? No cash left.
As I said I own this for the bounce & the short-term valuation. If I am still holding this in 6 months its not gone to plan.
Morality, anyone who needs to tell people how long they have been investing and that they are "successful" are obviously the opposite.
If you look at the financials, you will see turnover was $52m in 2021 ($8.2m net profit) and $63m in 2022 ($11.5m net profit).
Book value was $112 million in 2022.
These figures are set to fall (obviously). But... to suggest sales will drop to nothing which is what you did when you suggested they might run out of cash in 18 months is not something an experienced investor would even mention.
Sales are down and forecasts are down, but they are not non-existent!
The share price is low for a reason. True. But the reason is not because they will run out of cash or that they will have zero sales.
Stockopedia gives many other metrics that help with my decision that the current valuation is an anomaly.
I am very much into anomaly investing based on factual information.
I think I am well within my rights to call this share a turd. I mean, it is down 96% since IPO.
So, in my 15 years of (successful) investing experience, I have observed that small-cap companies which primarily operate in less-developed markets, and have CEO's from less-developed markets tend to be lower quality. They also have a tendency to adhere to less rigorous standards of corporate governance.
Cash is a relevant valuation metric, which is why I argued looking at PE is less relevant. I think you would also agree the market is forward looking. So for everyone astounded by how much cash it has, we should consider what the cash balance might look like 18 months from now. They burn through $20m a year? Where will that cash be a year from now?
As I said, I am a holder. Bought in at 8p. A lot of the games this business makes are terrible and could disappear and no one would care. Hello Neighbour is a good franchise though. That alone must be worth something to another studio.
My view is this bounces back to c. 15p. Then I'm out. H1 results will be ugly. They just brought in a CFO who used to be an equity research analyst (lol!). Cash will start dwindling. I don't need to be here to take the execution risk associated with a nasty restructuring. Until then, I am along for the ride.
I can see it hitting 13-18p range in July
36p was after hell of a drop. 6 month chart on the 1st trading day of January it was over £1 per share.
I'm not an expert in the field at all, actually I think it is crazy how these games make millions of pounds but i'm invested in the belief that 9p is too cheap.
This company gets a score of 89 for Quality by the relatively well respected Stockopedia.
It gets 99 for value, and 78 overall.
I certainly think the article in the Times was misleading given the high-valuation at the time, but at these prices and with cash at bank of £25 million and zero debt, this will rise further.
Someone mentioned earlier that in 18 months they won't have any cash left, which is of course a ridiculous statement because that is assuming they do not make any sales.
Sales are lower (if they weren't the share price wouldn't be 9p), but they still have some popular titles and some valuable intellectual property.
36p was too high. 9p is too low.
"Some of the research on here is terribly rushed."
As opposed to your own moronic posts on here calling this a turd? Or your revelation that the CEO is Eastern European? Why don't you tell us what you think his nationality indicates about the investment case.
As for cash level, it's a relevant valuation metric - particularly for a business in distress and at this ratio - so it's a highly reasonable discussion point. Plonker.
Looking solid this morning!
Some of the research on here is terribly rushed.
"Its profitable every year" - thats my because it capitalises a HUGE amount of costs. It is actually loss making.
"Its go all this cash" - true, but cash is dropping about 20million a year. Most their cash will be gone 18 months.
"Ceo holds lots of shares" - the ceo is a controversial character. Eastern European. Does some dodgy interviews.
Full disclosure I bought a tiny amount yesterday. Mainly on the fact I think the hello neighbour game is worth something to a company like team 17.
Expect a good bounce tomorrow.
Cash by December worth more than market cap ,so at a guess probably have 20-30 mill at the moment
If you can't buy- check if you gave filled in the revenant form to buy USA stock. That's what gave me all the trouble.