Think Twice?1 Aug '22
https://www.investorschronicle.co.uk/ideas/2022/08/01/thinksmart-shareholders-should-think-twice/
Thompson has spoken. Hold out says the Tipster - reject the scheme.
Before I give my view on this advice. First I've been pondering the return on TSL. This evening's price puts TSL holding in Block worth 37.6p (618750 shares * $77.76 block price/1.2 FX rate)/106.59m shares. Warrants dilution potentially reduces this to around 36p (which ST quotes in his article).
I would remind shareholders of our recent special dividend June 22 and the dividend from December 2021 worth a further $0.0939 = 7.8p. That puts us at 36.2+7.8 = 44p equivalent return.
My reply to ST's advice is if you want to hold Block, vote for the motion receive your proceeds and reinvest them in SQ. It costs a few pounds to do so and if you are as bullish as ST now appears to be, then good luck. I may take this route too because I see a lot of opportunity in SQ. If I hold SQ. shares I can hold them or sell them in the future - I can't do that now because they are locked inside TSL shares.
**Importantly** to keep the TSL Plc running, costs a million or more a year (assuming they reduce costs). Why prolong these costs? The call centre income is finalising so all we will do if we vote against the scheme is reduce our holding of Block squares to pay ongoing corporate costs. Moreover, if we reject the scheme what's stopping this reverting to a 40% discount like before?? Rejecting the scheme is certain to drop the price of TSL.
So why did ST advise to reject the scheme?
Is ST hoping that time will revert this back up to a point where he can point to it as a success? He can't now, and a number of people bemoan the fact they listened to his tip here. Well, Simon Thompson if you're thinking twice then I'm thinking thrice and and I *WILL* be voting for the scheme and would encourage everyone else to do so for all the reasons outlined above......
GLA...... and Think Smart :)