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I've just sold some R1. Getting 2.77 puts the arb back up into the interesting zone with YuMe at $4.14, but I am holding off on buying YuMe thinking that the YuMe price might fall back later today when the normal "arb window" closes at 4:30pm.

BDC - there's clearly a residual risk, but they already have 30% or so of the votes in the bag from the tender & support agreements. So there's only really Edenbrook out there, in my mind, who is big enough and activist enough to organise serious resistance to the proposal. And I don't think Edenbrook would do that unless they truly felt there was more value in remaining independent. So in that event, while doubtless I think there would be an immediate hit to the YuMe shareprice if the offer fails to win enough support, it might still recover in the medium term. And YuMe has just been through a strategic process. So they will know what the "next best offer" to the R1 one was. If that offer was, say $5 cash, then they might now have ambivalent views about the R1 offer. But if that one was say $3.50 then they would know that the R1 offer still represents good value. And if someone did bid $5 cash, you might expect them to make a formal offer once they see R1's F-4 document. What would they have to lose? Either they get YuMe or they cause R1 some grief and perhaps cause it to increase its offer. Win-win. So in my mind I think the risks (in the arb) are acceptable for me. No advice intended.

Curiously the arb has almost disappeared again with the relative rise of YuMe this afternoon, so I'm backing off buying YuMe or adding to my arb position. Selling R1 at �2.67, buying YuMe at $4.17 and with xrate at $1.3245 the arb is under 3% (i.e. actual YuMe purchase price is less than 3% below the theoretical purchase price of YuMe under R1 proposed acquisition). Since it costs me 1.5% in forex costs buying YuMe in the volumes that are available, that is a marginal proposition now. This is what should happen as R1 is sold and YuMe is bought - the arb should disappear. BUT the YuMe rise is on very low volume so I wouldn't be surprised to see it open up again.

BDC - I disagree that it's only "weak private holders" who have been selling. I regard myself as a fairly strong private holder. But I've sold a significant proportion of my holding (and bought YuMe) because the arbitrage (and risk management option) on offer has been so attractive. Even today, when I'm toying with the idea of an outright add rather than an arbitrage, it looks like I can pick up R1 shares meaningfully cheaper by buying YuMe shares (albeit with the risk to deal completion and a bit of forex exposure) than by buying R1 shares direct. And if I buy the YuMe shares I get the potential upside of a counter-offer or R1 sweetener to offset the downside risk of deal failure. I can't believe I'm the only one trying to take advantage of this. The system is just set up to favour selling of R1 and buying of YuMe. If someone wants to play the arb, they sell R1 and buy YuMe. If someone really wants to buy R1, they might rationally buy YuMe instead. If someone wants to sell R1 they sell R1. What's a bit strange is that the arb closed to virtually nothing at one point but then opened up again. I don't know whether that was someone closing an arb position or just a forced seller of YuMe selling enough to move the price down, but either way, the arb is still there at a level which I think is causing net selling of R1.

The only "official" date is 5th October and is given in the merger agreement: 'provided that the Company has not effected a Company Adverse Change Recommendation and has complied with its obligations in Section 1.1(g)(vii) . Parent shall use its reasonable best efforts to prepare and file with the SEC by a target date of October 5, 2017, a registration statement on Form F-4 to register under the Securities Act, the offer and sale of Parent Common Stock pursuant to the Offer and the First Merger (the � Registration Statement �), which shall include a preliminary prospectus containing the information required under Rule 14d-4(b) promulgated under the Exchange Act (together with any amendments thereof or supplements thereto, the � Offer Prospectus �)' At the general meeting, when I asked Ted directly about the likely timing in the townhall part of the meeting he said "later in October" as I have reported elsewhere. I have to say I am surprised they didn't take the opportunity in this morning's rns to update on the likely timing of this document given its importance. And if you google "reasonable best efforts" you will see that this is regarded at least by some as an extremely onerous commitment. I am therefore also surprised that R1 didn't do enough due diligence ahead of signing the merger agreement to understand in detail what would have to go into the document and what the likely timetable for preparing that document would be.

rusty - 3rd December may seem a long way away, but the YuMe 3Q results could be out in the next couple of weeks (November 9th last year). So if they have kept their act together and can show some profit and some cash generation in 3Q that might give the R1 shareprice a bit of a boost.

It's a very iffy "no reason" statement though isn't it? (A point I've also made on another bb). Their statement today is focusing only on the share price weakness since the TU on 17th October and refers us to the outlook statement. So given the post-TU weakness is really just a continuation of the pre-TU well-established downtrend, pointing to "no reason" for the fall post-TU is a bit weak. And the TU itself contained a bit of a surprise (to put it kindly) on the cash position which, although they tried to reconcile it, did leave some questions on what was happening with working capital. So to address that their "no reason" comment really should have had something a bit more positive on the cash outlook I would have thought. And then as far as I can see, the outlook statement in the TU was pretty non-committal on actual "outlook": "we expect our unified programmatic platform to be the principal driver of future growth" "We are intensely focused on driving further efficiency in the business and our goal remains sustained profitability" So a goal of sustained profitability, when we know they usually seem to mean adjusted EBITDA profitability anyway when they talk about profitability. A statement of the b. obvious I would have thought. Let's hope Singer gets on board soon and shakes things up a bit.

"As R1 are in a closed period, insiders such as BoD's and institutions involved in the deal cannot buy any stock. So we're currently at the mercy of small PI's selling piddly amounts drip, dripping the share price down." - from your note of your conversation with Ed. Is that from Ed? Surely Toscafund are the only institution made an insider on the R1 side - on the basis that they are the only one which signed something (a "non-binding" letter of intent). And they are already bumping up against the 30% threshold. So I don't buy the argument that private investors are selling and none of the big holders can mop them up so the price is falling. RG, R&M, Cogefi, Norges, Lombard Odier are all free to buy aren't they?

BDC - it was a great opportunity to talk to R1 (TH, DS, RN, MO) and ask questions. I haven't provided a full write-up but at the time I posted the text below on another bulletin board. Makes interesting reading now in the light of subsequent share price performance and the "miss" on cash. My own view is that the focus in discussions with analysts would have been on current period earnings and revenue, plus shape of future periods. While cash might have been touched on, everyone would recognise how much that could change at a given period-end depending on the timing of receipts and payments. So I don't read as much into the "miss" on cash as one poster would have us do - although clearly they did miss. -------------------------------------------------------------------------- Posted on a d v f n, 25th September: Agree. Really good Q&A session plus informal chat afterwards. I certainly came away with renewed confidence in the outlook. Perhaps the single most useful bit in my opinion was the discussion around "management expectations" and brokers notes. While they were careful not to say that they provided "guidance" to the brokers, they pointed to the number and consensus of brokers covering the company and suggested they were not uncomfortable with what the brokers were putting in the notes. We are likely to get 6-monthly TUs going forwards, with the first one due in October. The F4 "prospectus" filing should be published "later in October" with the timetable driven in part by the level of detail required - including getting audited accounts for all the individual bits. I've just bought some more on the basis of all that.

BDC- yes, I was there.

Yes, Ted was giving the same message at the General Meeting - i.e. that they had to go back and produce audited accounts for all the bits. So I think we might eventually get to see (in the F4) full-year accounts (1st April to 31st March?) for Perk, RadiumOne and R1 all on the same (IFRS or US GAAP) basis. And perhaps even pro-forma accounts including YuMe. Which might help to fill in some gaps in our knowledge. I am hoping that they might take the opportunity provided by the delay so far to say that they would now also do this for the 1HFY18 accounts. But maybe this would mean further delay.

Thanks for feeding back BDC. Encouraging I think. Just a shame R1 didn't do enough due diligence on F4 requirements before they agreed to the 5th October "reasonable best efforts" target date in the merger agreement. And the "later in October" date that Ted gave at the general meeting also looks in serious doubt now. It doesn't exactly fill me with confidence that other aspects of their due diligence have been top notch!

"why take legal action in the first place" You normally take legal action as a last resort to try to recover money that you believe you are owed. Most rational companies would hope that the threat or initial stages of legal action alone are sufficient to bring the counterparty to the table, since the cost of full-blown legal action for both sides can be horrendous. R1 appear to have got the counterparty to the table ready to talk mediation. That sounds like a success to me.

For the avoidance of doubt STT, I think the TU was a big step forward in transparency. The fact that we can even have a discussion over an element of the cash bridge is purely because R1 attempted to reconcile the cash position with the previous one. The last comment about the TU that I made to Dan at the General Meeting was to make a plea for him to include the cash position in it (something R1 hadn't done in some recent TU's). He grimaced, from which I took it that he didn't particularly want to, presumably because it is quite a difficult thing to get approximately right, especially when you are in the process of integrating new companies, assets and their associated bank accounts. Not only did R1 include the cash balance, but they also included a breakdown of the main uses of cash. A BIG step forward in my opinion. This is a TU, not the full interim results statement, so it is unreasonable in my opinion to expect much more detail than this in the cash update.

Thanks bmac.

I think one credible conclusion, IF the scenario I put in the previous post is somewhere close to the truth (and I accept it may be nowhere close to the truth), is that for whatever reason R1 (and/or RadiumOne) wanted to make the headline purchase price as low as possible. So they carved out the (big) working capital asset and left it with the sellers, leaving R1 to fund working capital from scratch.

Agree this was a confusing element in the TU. At the time I came to the conclusion that Bmac did, i.e. that getting on for $10m went on RadiumOne working capital - but it does sound like a very large amount when they were only expecting $65m to $75m in revenues over the following 12 months. And how did the WC cash drain arise? If there was significant working capital employed at the time the purchase was closed and it was to be transferred to R1 then surely this would have been one of the "certain assets" that R1 was acquiring from RadiumOne and so should have been included in the headline numbers ($5.5M in cash + up to $16.5M deferred). So perhaps an alternative is that working capital was not included in the "certain assets" and perhaps the Radium One owners remained liable for paying outstanding bills due and for collecting money owed relating to pre-close transactions. This would mean that RhythmOne would then immediately start building up working capital relating to new post-close transactions (paying suppliers and billing customers). If we take the $70M mid-point estimate for 12-month revenues, then $10M working capital would equate to 1/7 of annual revenues or a bit under 2 months of credit to customers. So is it possible that since close they've paid for the equivalent of about 2 months of revenues to suppliers for which they have still to receive the actual revenue from customers? Another thing I found confusing was that for the "broader" working capital investment they talk about expecting "to recover a majority" in 2H, but for the RadiumOne wc they talk about "realizing the benefit" of c. $5m in 2H. So what does "realize the benefit" mean if not recovering the cash? Does it just mean seeing the cash, but then that cash will go straight out again in credit for new transactions? And again the reference to "acquired RadiumOne working capital" in the piece on 2H makes me think this should have been one of the "certain assets" acquired for the headline consideration. If the 1H results include a "business combination" note for RadiumOne, allocating purchase consideration to identifiable assets and liabilities plus goodwill, then it may become a little clearer.

Thanks for posting that Proactive Investors link, jupiternmars. Good to see Ali starting to tease the capital markets day content. Hopefully, anticipation of that can sustain the excitement that has been built through the Arrowhead stake, all the patents rns's, the court case and the new chair.

Would a fair summary be: Dear market This really, really isn't a profit warning and if you have been paying attention then you, like us, wouldn't be surprised by how bad 1H is going to look compared to last year and indeed our expectations for the whole of this year. Yours....

The big jump in shares on loan reported by Euroclear for September (2.87m or 5.9%, up from 1.8m on a post-consolidation basis or 3.7% in August) suggests that there has been a noticeable increase in short positions during September. Yesterday the FT tearsheet was showing short-selling activity as "high", although today it has reverted to "low". I will take these as at least supporting the theory that there has been a reasonable amount of arb activity on R1 (shorting R1 with corresponding long YuMe positions) since the acquisition announcement, although clearly there are other possible explanations for an increase in SoL and short-selling activity. At the GM I did talk about arbitrage and was told that R1 thought that there had maybe been some of this with the Perk transaction. This deal was announced in early December and closed in the 2nd half of January. Looking at Euroclear SoL data around that time, it showed a big increase, from 6.4m (pre-consolidation) shares in November to 10.6m in December to 18.5m in January, before falling back to 4.2m by March.