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Sjb777 I was slightly more generous with the assumptions and had 100m churned, 50m to go.
But if the noteholder can drive the price down to 0.50 in selling those 50m, the conversion then creates 200m shares, so another 50m to be churned after that.
And yet some people cry foul at the use of the term 'death spiral'.
"6-8m sold today"...
Nonsense. Not even a third of that! 1-2 million is a typical day. Yesterday was a news day so more knocked out to telegram mugs, but it still finished flat. Stop just making stuff up.
As for my "narrative", I've been proved 100% right in the three months since first commenting here. You were told by now long gone posters that there would be no selling, yet buckets of confetti have been tipped out and the value of the company has halved. So rather than dismissing my view, I suggest you would be better advised to heed it.
This has A LOT further to fall. If a deal with a motley rag tag of back street garages - the sort of places no EV owner would ever dream of taking their car - is all your Board have got to RNS Reach about, it could fall very fast very quickly.
And the chances of that prospectus ever getting approved recede with every drop.
"Must be nearly there."
What makes you say that? It's potentially a 150m+ share overhang and neither you, me, nor anybody other than the death spiral provider have any idea how far through that they are.
As a reminder, they make money at any price, and the lower they drive the conversion price the more they make selling on the way down.
By my calculations, all £1,000,000 drawn down can be converted from next Tuesday. From the terms in the 8 January RNS the conversion price is now guaranteed to be a maximum of around 0.65. It could be lower if the noteholder can drive the price down further between now and submitting the conversion notice.
RNS Reach with no financials, so not material / price sensitive and only a tiny proportion of Servicesure's 600 small independent garages are EVSure accredited. If this is the only news the board have got, they are well up the creek. All this will do is provide a little bit of liquidity for the death spiral provider from the telegram group mugs. What I said back in November still stands - any and all buying will be aggressively sold in to.
I'll do a little bit of homework on the death spiral dates later. I think we're nearly at the point where all £1m can be converted to shares. At these prices that dilution is going to be eye-watering.
Thank you for your magnanimity Toplocks, and others.
Personally I don't believe a word of this morning's RNS. If the RTO completes by the end of the quarter it will be my turn for the humble pie, but I maintain the timescales are out of the company's hands, and it has been work in progress for well over a year already.
What this really needs to reverse the decline is good news on trading. That absolutely has to be the next RNS. If there is no good news in the offing, its a long fast ride down from here when the death spiral really gets going.
And to reiterate I have no position here, never had and never will. I don't short any shares, again never have and never will. As any real shorter will tell you, it is impossible to get borrow at this market cap and generally anywhere below about £100 million.
Given what I've posted about the opaque related party deals and the death spiral (by my calculations the overhang is at most less than half cleared - another buy swamping sell today), no doubt that is a popular view among those who have swallowed all the hype they've been fed hook, line and sinker and are long and strong with their 2p average golden tickets.
Which is going to make this all the more painful when, having ignored another warning, you lose money because far from being full of ***** I was right. Again.
If what I'm hearing is true, I very much doubt it is.
Remember if there were any good news such as was promised at the AGM, they would announce it to stem the share price decline. That there isn't is telling.
If you heeded the warnings, fair enough. If you didn't, you deserve all you're going to get.
I think the lock up period is 40 calendar days. "Trading Days" (capitalised) are mentioned elsewhere in the 5thJanuary RNS.
I guess we will find out on conversion in the coming weeks whether these shares have already been flipped. At a market cap of £12m a £500k position will be notifiable.
Because of the first word of your essay, everything else is so much meaningless cobblers.
Speaking of which, if my Auntie Mary had them... they would be reminding us at every opportunity not to use such dated tropes in today's gender fluid world.
Sells now appear to be £5k at a time, presumably because the market was struggling not to choke on £10k / 1.1m at aa time.
It seems PI appetite to soak up those sells is evaporating. But a bit more rampy rampy on telegram might feed the mincer some more.
ElecticalEng, I have my own opinions and believe me I have done my own research. I find all the risks here to be on the downside. As previously stated, the related party loan, repricing of warrants, rewriting of CLN terms and the death spiral show a clear direction of travel in the last 3 months. Both TM and Recyclus are cash guzzling dogs, desperate for funds. That much is obvious, the company wouldn't be resorting to the actions it has over the last three months if it were generating operating cash flows.
And sorry if the phrase 'death spiral' irks you. It is what a Loan Note convertible to shares at a discount is called in Corporate Finance circles. So called because as each drawdown of the loan is converted to shares, and those converted shares are placed in the market, the price falls because demand cannot soak up the supply. So the next drawdown conversion is at a lower price, meaning more shares, and the downward spiral tightens.
The company is dealing with Government bodies and large corporations, all of whom can see what is unfolding here. You do not need to be a Corporate Finance expert to work it out. The FCA, the body responsible for approving the prospectus and eventual RTO, have as their primary objective to ensure orderly markets. The market in relation to TM1 shares has, in the last three months since the 7 November announcement of a related party loan, been anything but orderly for reasons some of us who have seen it all before can guess.
That is why I question whether the prospectus and RTO will ever be approved. There are a number of companies in the recent past (see DEV) where regulatory approval of a scheme that just did not pass the sniff test has been delayed to the point where the company simply ceased trading. I think given the delays, and the company's response to recent liquidity issues that may or may not have been raised by the regulator, that has to be at least in the back of a reasonable appraiser's mind. Silence on this matter is definitely not a good thing.
Before today your last comment on this share was when the price was 1.40p in the middle. That it has almost halved since then is a matter of fact. So can I suggest you stick to the Electrical Engineering aspects of this when commenting in future, and leave the Corporate Finance to those with more experience.
I am of the honestly held opinion (got to be careful with the libel) that this is likely to be a party related to the offshore death spiral provider forward selling shares that will later be converted into existence.
It would be the de-risking thing to do.
The floor is zero. Given the conversion formula, there is no price down from here at which they don't make money on the deal. It has a lot further to fall before they've churned the £1m worth drawn down into private hands.
To be fair Fozdog my 0.65p call was based on the related party loan with the shares as security as announced in early November. Forward selling those at any price above 0.65p would give the creditor a profit when the security was surrendered. That was the obvious risk averse play for the noteholder.
Since the drawdown of the death spiral the shares to be created for conversion could be sold at any price, literally any price. There is no floor above zero for that £1m worth. The lower the price, the more shares the death spiral provider gets, the greater the dilution for existing holders.
The regulator's main job is to maintain orderly markets. With a forward seller drawing in more PI money, and it is solely PI money, there are no institutions in at this mkt cap, the last thing TM1 could be described as is an orderly market. The RTO is surely further away than ever after the latest price action.
PIs here can't say they weren't warned. Or on telegram, where I was told I was being ridiculed.
I'd very much doubt they're laughing now.