The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.
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Looks like another state will be launching....:)
https://www.wcax.com/2023/05/08/do-vermonters-want-take-gamble-online-sports-betting/
XLMedia confident despite first-half softness
https://www.sharecast.com/news/aim-bulletin/xlmedia-confident-despite-first-half-softness--13536500.html
Is Now An Opportune Moment To Examine XLMedia PLC
https://simplywall.st/stocks/gb/media/aim-xlm/xlmedia-shares/news/is-now-an-opportune-moment-to-examine-
Well someone has been buying chunks today …
Yes Terry, a fair point along with all the positives too. We can all decide which way to bend.
You called it correctly MadDog. Terrible update just as it looked like we were on the cusp of generating some net cash…No the medicine ain’t working. Probably oversold but who really knows now (Another dog share to away for years I guess).
Always amazes me why people wait, then sell for a much lower price, i.e. sell for 8.7 instead of 9.5, still just means I get to buy back what I sold at 13.3p for cheaper
There is a bull case worth making here too. XLM generated a ton of cash last year (£16M!). Half of that went on deferred considerations, which are mostly paid off now; the other half on R&D (websites). Over time these deferred considerations, plus the writedowns of the old business, will be flushed out of the system. More of the revenue will hit the bottom line as profit, and more of the cash will be available to.... pay as dividends?? XLM could be run as a fairly low lift dividend play. There will be good years, when States legalise and we get a spike, and/or the wider industry decides to push on the promotions for new customers, and leaner years, which 2023 is shaping up to be.
Another factor that could be big for XLM is AI. XLM is (mostly) in the business of generating quality sports-related content that also encourages users to place a bet. The key to its success is producing quality content that users actually engage with, under a brand that the users trust and keep coming back to. XLM already owns those brands; maybe it could use AI to generate the content at lower costs? To be fair I don't know how much of XLMs costs related to paying content creators, but "staff costs" account for 28% of revenue; any reduction would go straight to the bottom line.
Overall I do think XLM looks oversold. Even if it doesn't turn out to be a huge growth play (that feels unlikely at this point) it could be a meaningful dividend play, and I suspect it takes the market some time to switch from one mindset to the other.
Then again, I would love to know what bad new the market was already pricing in, given that today's announcement apparently wasn't already priced in!
I have a large holding in XLM, so please don't accuse me of "deramping", but I think it's important to see things realistically here.
First: this is not "MM manipulation". This share is a minnow, and doesn't trade high volumes, and simply isn't worth the MM's time to manipulate.
Second: £109M of XLM's assets - thats over 83% of the total - are intangible/goodwill, the majority of this coming from the websites they have bought. If it turns out that the business model is not as profitable as we all hoped, then those assets are worth far less than they are carrying for on the balance sheet today.
Third: while I agree that the "spikiness" was a known factor, the fact that the entire market seems to be in a slump is also very relevant, and is unrelated to the spikes.
What surprises / worries me is that the contents of this announcement weren't already priced in. As discussed, the spikiness should have been well understood, and a slump in the wider gambling sector seems like something that anyone watching the industry closely would know about - and would explain the steady downward trickle over the last few months. So why is this announcement a surprise?
Honestly, I'm feeling more and more on the fence about XLM. Here's a brief summary of the pros and cons, please add any I've missed!
Pros:
- many more states - including some whoppers - have yet to allow gambling -> room for growth
- company has almost finished it's turnaround & writedowns; almost entirely focused on new strategy
- generally in good financial health
- potential takeover target?
- a slump in the wider market should be temporary. Also things like MA not spiking like NY did seems reasonable given the timing (i.e. after the superbowl) - presumably all the would-be bettors will just join early next year instead.
Cons:
- the regulatory environment pendulum already seems to be swinging the other way - e.g. states adding laws banning revenue-share models
- there is no guarantee that the other States will follow suit. Many times States don't all adopt the same laws - that's kind of the entire point of having States!
- still yet to be seen what the "steady state" revenue will end up looking like, when there are no more spikes.
- presumably the market will reach saturation at some point? I.e., when there are no more people out there who want to place a sports bet, then what does XLM do? Just wait for the next crop of punters to turn 18/21/whatever-the-legal-age-to-gamble is? Or focus on convincing existing punters to sign up to multiple betting sites, each one paying a fee?
I agree Oldboy. It's a debt-free, profitable company, trading around 80-90% below asset value, and in a growing market. Hoping for a ten-bagger over the next few years.
Agree Nav. And unless you have been living under a rock for the last 6 months or just plain stupid this was expected. Last year's H! spikes were large, especially with NY opening and this was never going to be replicated H1 this year. H2 momentum will build again and then again into 2024. Annoyed but not worried
Seems like a fair, sensible appraisal of their current position, with lots to look forward to. Strange.
MCap - £22million
Why couldn’t the company have just said in line with results. A very poorly worded statement and one that was bound to be negatively viewed.
Probably just the MM's bunging thru some fake sells
Can't believe people would sell at these prices. Hope if every holds the price will stabalise
They never let you buy when they are cheap
I agree with you Terry but as PI's are always the last to know and the shares price and value of the company has halved since those Dec figures one could argue the bad news is already priced in. Again like I said I don't doubt further share manipulation but the underlying value remains well above Current share price value
I am sure the share may well get manipulated but at the end of the day the NET assets of the company including cash in the bank as of 31st Dec 2022 was worth over £100 million. The company is currently worth at share price value £29 million so we would be a ripe takeover target .
Update sees global markets slightly softer, but no problems and inline with projections.
Directors generally focus on running the business thank god, not appeasing your share price concerns.
Come back in 3 years when it's 80p.
I feel the board need to put a statement out to reassure investors. The company had £10 mill in the bank , no debt, making £5 mil profits a year yet is valued at £27 mill it doesn't add up. If there is a black hole somewhere in the accounts or future revenue then the board are duty bound to share with us. If there is no reason for the drop hen surely the board could look at a share buy back at these prices to offer some stability and reassurance . Why the silence ????
Strange no director buying at this price
Manipulation to go private on the cheap?
When a publicly traded company becomes a privately held company, the public company's shares are purchased at a premium by the investors buying the company. The company is delisted from the stock exchange where its shares formerly traded.
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to more than double over the next couple of years, the future seems bright for XLMedia. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
https://uk.sports.yahoo.com/news/buy-xlmedia-plc-lon-xlm-093036855.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAMEbgtP-68Qyz8VcIIYPrn7-iIbAgTkpjvSGUEFizWrG0CEnBsQtgQviuNm5U9ST1j8hrZyXMTEBXDTRd16GlGP7vQ0UsqwfPtMJ8f5oK-Y6v93EUryJ8ThLQS6i0gpYnJ-G15bWb1lMMEZj60pLOC7a8hak8KPVJTKS9HyZaAV9
Very nice find thanks Joe