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Any suggestions as to what has caused this today? I can't see any reason for it unless something is happening in the background
Spot on. Lets see the results to Dec as well
any delay would appear to be in TSL's favour :-)
Was published some days ago though……….shares went ex div and have since recovered that. Volumes suggest something is cooking other than St.
Thanks suprised for the info .... another winner from ST :)
https://twitter.com/surprised_trade/status/1462705477868040194
Shareholders in a financial services group TSL could be heading for a bumper payday early next year.
'...Frankly, it would be irrational for Afterpay not to exercise the call option early as the cost of buying out ThinkSmart can only rise in future given that Clearpay’s growth is likely to accelerate as part of the Square and Afterpay combined business. Importantly, any buy-out of ThinkSmart’s stake will now have to be made in cash
Effectively, ThinkSmart’s sum-of-the-parts valuation is 151p a share with the valuation risk weighted to the upside. More importantly, Afterpay’s imminent change of control could lead to a major liquidity event to turn ThinkSmart’s valuable holding in Clearpay into cash.'
https://www.investorschronicle.co.uk/ideas/2021/11/10/heading-for-a-profitable-exit/
I know as one is mine.
Thanks for sharing Carcosa61
FWIW (probably not much) here is a link to my valuation spreadsheet along with some commentary:
https://docs.google.com/spreadsheets/d/1CZ5EUBUUQscZjiMWDaScM8E5e2mcB3q3ejo2mcF6jWo/edit?usp=sharing
Feel free to copy and use for your own purposes. and/or post your own thoughts
I believe it went ex dividend yesterday (Thursday). Today is the record date. 5.2492p/share.
Afterpay may state that they want to pay off the Clearpay shares in stock but I understood that once a change in ownership happens, payment has to be in cash.
Re 'Afterpay Shares that may be issued or exchanged for the remaining Clearpay shares held by ThinkSmart as a result of its exercise of the put option is capped at 5% '
- That equates to GBP 923m so it's not going to affect the ability of Afterpay to 'fully' pay for ClearPay's 10%
Tha may be so but it intrigues me........why mention it in the ‘booklet ‘ at all? Someone, somewhere, thought it worth capping the future liability at 5% ..or ...£923million. Why?
Ex divi 5p so I am expecting about 98p open, be interesting to see what happens
Wow just noticed the 400K buy going through. That's a great sign, hopefully we'll get past 110p tomorrow and keep on moving up
Thank you for for the detailed discussions. Bottom line for me is that sitting tight right not and ride the waves will probably be best outcome. Whatever options we end up with the sp is definitely going to be quite a bit higher than where we are right not :)
Historically I think there was an impression that the value of the the call/put options equated with the value Afterpay put on the value of ClearPay. This was erroneous. If you applied the Black-Scholes Model to those options then it aligned reasonably well with ThinkSmarts valuation of Clearpay's 10% holding.
Clearly, at least to me, the arguments surround how much is Clearpay worth? A reasonable person may think it related to the overall turnover, or profit, or some other metric that contributes to Afterpay's business. Looking at Afterpays presentations I would think 10% of the valuation of Afterpay is the result of Clearpay is a good base line. That works out to 134p/share in my calcs but at the end of the day its based on historic numbers.
In the Booklet there is reference to independent derived valuations should the parties not come to a common agreement; but then that, to me, just provides more pressure on AfterPay to sort it out asap. Thinksmart might be quite happy to let things slide/delay as in all probability the value of Clearpay increases with time...
Hi! Thank you for the prompt and detailed response. All food for thought.
Does anybody know if ThinkSmart have any business plan for the time after the sale of ClearPay or will they distribute as dividends all cash to shareholders and perhaps become a shell company/"SPAC"?
Hi, the valuation in the Afterpay accounts was stated as at 30 June 2021 as far as I can see. There has been quite a discrepancy in their valuations (the $99.87 is an increase in one year from $3 million!) , there was an FT article about it a while back https://www.ft.com/content/91db3d6e-cfa1-450d-bee4-7fa09e5907c0
Thinksmart's valuation has gone from 53.7 million (end of June 2020), to £106.6 million end December 2020 and now £125 million end of June. So by Jan 2022 likely to have increased further too.
There will have to be a trade off here, clearly the value of Clearpay is increasing, so Afterpay will want to exercise the option as soon as possible, but they may have to pay a premium to their own valuation in order to get Thinksmart to agree (and Thinksmart can just hold out knowing the valuation likely to increase over time). It would be interesting to see what the SPA says regarding how the independent expert valuations work in practice if they can't come to an agreement, and how long this could drag out for.
Hi, a quick question please. was the Afterpay valuation of liability in accounts dated end-June, or was it a valuation at an earlier point in time?
Thank you!
I got the impression he may have missed that too, as they clearly state they intend to complete the purchase by issuing Afterpay shares (not cash), which presumably would need to be before the takeover (although Afterpay will still have a secondary listing on ASX for existing shareholders but these shares don't have full voting rights).
There will be a lot of discussions happening around valuation. Thinksmart have it listed in their accounts at £125 million end of June, whereas Afterpay have the call option liability on their accounts at same time for $99,87 million aus dollars , circa £54.3 million (and they are both claiming the independent experts used the valuation principles from the SPA).
Re 'Afterpay Shares that may be issued or exchanged for the remaining Clearpay shares held by ThinkSmart as a result of its exercise of the put option is capped at 5% '
- That equates to GBP 923m so it's not going to affect the ability of Afterpay to 'fully' pay for ClearPay's 10%
WRT Simon Thompson's IC article it seems apparent (at least he did not directly mention it) that he has not read the Booklet where, amongst a myriad of other things they clearly infer they intend to buyout ClearPay's remaining stake early.
https://twitter.com/surprised_trade/status/1458560993546620928
Capital return & divi pymnt due December with a current 50%+ upside forecast for January 2022 on potential buyout
IC article in part........
'......Frankly, it would be irrational for Afterpay not to exercise the call option early as the cost of buying out ThinkSmart can only rise in future given that Clearpay’s growth is likely to accelerate as part of the Square and Afterpay combined business. Importantly, any buy-out of ThinkSmart’s stake will now have to be made in cash......
.......Afterpay has not updated the market on its first quarter trading to 30 September 2021, but Clearpay’s financial contribution is likely to be proportionately even higher, and rising. However, even if you ignore that possibility, then ThinkSmart’s fully diluted stake in Clearpay is still worth £151m (142p share) after adding back the 17.5 per cent liquidity discount applied in the June valuation.
Effectively, ThinkSmart’s sum-of-the-parts valuation is 151p a share with the valuation risk weighted to the upside. More importantly, Afterpay’s imminent change of control could lead to a major liquidity event to turn ThinkSmart’s valuable holding in Clearpay into cash.'
The ‘booklet’ has much relevance - in particular that which is omitted. Very little is mentioned of the ‘Put Option’ except that it is capped...... “As disclosed in Afterpay’s 2021 Annual Report released on ASX on 25 August 2021, the maximum number of Afterpay Shares that may be issued or exchanged for the remaining Clearpay shares held by ThinkSmart as a result of its exercise of the put option is capped at 5% of Afterpay Shares on issue at the time of exchange”. The butterfly spread is tightening....??