Tricky_D, I was hoping someone would point out to STT1 that News corp haven't actually got rid of Unruly but swapped their investment into TRMR...presumably because they think they have the management to run the business better. Also installed Rebecca Brooks in a management role, which surely means News corp want TRMR to succeed.
"The guaranteed £30m will need to be paid, regardless of whether there's a recession on or not. Regardless of whether there are inventory payment issues or not.
The £30m represents 1/2 the cash they stated they had as of 31st Dec."
Stt1, so by your own asmission you are talking rubbish....£30m over 3 years is £10 per year. And it is 'ad spend' whatever that is....I'm not sure that equates to a £10m liability against their cash reserves. I took it to mean a guarantee that TRMR would put £10m/year of advertising through News Corp....which could be something quite easy to achieve in the normal run of business....although a recession may make things harder, but it's the same for most businesses in a recession.
"As I said they can re-issue shares and thus acquire cash"
Wouldn't that be classed as a rights issue? If so it would require the market be informed and again some people can be jittery about such things.
"As part of their acquisition of Unruly, they guaranteed minimum £30m of revenues to News International....5 months have already gone since the acquisition."
And your point is?!?
My brother once did some electrical work for a guy who owned a pub....instead of being paid in cash he got paid in beer. My brother was happy because he liked a drink and the barkeeper was also happy because the actual cost for the work to him was a fraction of the cost of the beer. I wonder if that's relevant!?
jrlse, thanks for the informative answer.
I suppose the obvious question is what do TRMR bod intend to do with the shares in treasury? Or do we just have to accept that it's for 'flexibility'....surely cash is the most 'flexible' option available to a bod (especially with a recession looming).
Rricky_D, it would be interesting to know what they plan to do with the buy-back shares.
From what little I know, shares that are purchased from a buy-back are held in treasury....then they may be cancelled or used for some other purpose. I'm assuming that a company cannot buy-back a share and cancel it in one go. The share probably has to be held in a company account (treasury) and it is cancelled from there (using some process I know nothing about). Of course the shares in treasury may be used for other purposes - (guessing) employee share incentive scheme or an acquisition - but it seems a little counter intuitive to spend cash to buy shares and then to give them away.
I have assumed that share buy-backs are done to reduce the number of shares in circulation (or to keep it stable)....to increase the earnings per share figure & 'possibly' the dividend paying potential of the company (when it becomes profitable!!). Hence why cancellation of the shares (from treasury) seems the 'normal' thing to do....not that I understand what is 'normal' or not.
"bald_eagle, as (I believe) a former company's accountant, since retired, would possibly be more able to explain the situation and the pros and cons?"
Tricky_D, not sure I understand the above. Are you suggesting that I'm a 'former company's accountant'?....which couldn't be further from the truth. Or perhaps you meant yourself....or some other person?
PS. I would have thought that the shares in treasury from the buy-back would simply be cancelled.
Not sure if there is much chance of a dividend here given the current economic uncertainty & the possibility of another merger/acquisition...but I suppose IF they did post stellar results then anything is possible.
We do have the share buy back which seems to be proceeding (although I haven't paid much attention to it). I suppose if management believe that the SP is remarkably cheap then the buy-back makes sense...although investors would like to see some of the cash coming their way.
"...the only thing that matters is that you make a profit"
Sometimes easier said than done. Especially with some people over-hyping a share (mulibaggers) and others saying it's about to collapse.
PS. Not referring to TRMR but stocks in general & discussion boards especially.
I find that 'negativity' is when other posters write something I don't like about a share I own and 'reality' is when I write something about a share other people don't like!!
'Beauty is in the eye of the beholder'....where 'beauty' can be replaced by 'negativity' and/or 'reality' at the flick of a switch.
"Thats the problem, with asking for info from posters. If they have an axe to grind you will never get a balanced view."
What a rather silly post. Everyone has 'an axe to grind' to some extent and will give their opinion based on their viewpoint & with 'possibly' one eye on somehow influencing the shareprice. The balance comes from having the likes of STT1 & Tricky_D discussing their very different viewpoints NOT from sticking ones head in a rusty bucket of sand and ignoring everyone who says anything negative whatsoever.
I applaud Tricky_D and others who tackle STT1 on the validity of his/her posts....that's where the real situation probably lies...somewhere between the two opposing camps.
RTHM & now Tremor talk a good fight and have an annoying habit of delivering Jam tomorrow statements....that's why the SP is probably where it is. The pro-camp would say there is huge potential, the nay-camp would argue otherwise.
Basically until TRMR start to deliver on their promises the SP will bounce around without much direction. Plus we now have a likely Coronavirus recession ahead of us and the uncertainty of that.
Mind you other tech companies have been doing quite well I believe.
Hopefully when the SP increases the spread will decrease from the 15-30% range to something more 'sensible'. I suppose when the SP is in the pennies and volumes are low (monetary value of the trades) the market makers need a bigger spread to create a profit for themselves.
At some point a share consolidation may be sensible...having billions of shares for pennies seems a little odd. Perhaps 100 million shares at £3 or £4 would make the company more attractive to certain types of investors (wishful thinking re. the market cap for the future!).
TAF, what do you mean by the spread being 'fake'?
The spread is often unusually large....I don't know if that is 'fake'.
What is really annoying that the % gain displayed jumps around dependant on whether there is a buy or a sell. That's completely 'fake' information. All day long the monitor can show 20% gains but at the end of the day the buy & sell figures haven't moved a jot. The spread - buy & sell prices - seem to roughly coincide with what a PI would get when trading Altyn (although my experience trading ALtyn is limited).
Shiny new equipment is all well & good....but there's a lot more to getting & keeping production up to 100,000 Oz per year....skilled & trained employees to use the new equipment, parts for maintenance & service contracts.
The true test will be the production updates and interim/final results that show production is increasing sustainably. I would also like to see the grade of the ore increase....perhaps the new equipment will allow them to target ore bodies more clinically.
"10,429,930 new ordinary shares @ 1.50 = £156,448.95"
Errr, that's a calculation of what the shares are currently worth. No more, no less.
At some point in recent weeks an agreement would have been reached with the service provider to settle their bill by issuing shares at an agreed price...let's say 1p (a guess). The agreed price would not have been above the SP at the time of the agreement. Since the SP has only recently spiked to 1.5p it seems unlikely that would have been the agreed price (hence my guesstimate of a lower figure of 1p).
So 10,429,930 shares at 1p would mean the bill was around £100,000.
If the service provider is allowed to sell the shares then in theory they would have a decent profit...but of course dumping 10 million shares in one go could depress the SP a bit. But it's all purely speculation and of no consequence to small investors. A bit of fun during lockdown!!
TAF, you missed my little joke....£36,504.76 equates to 0.35p per share (a figure the SP is heading back to...apparently!).
The 'guesses' about the service provider bill that the new shares will pay for is irrelevant....but it won't be as low as £36,000 nor as high as £156,000, somewhere in between.
Almost a pointless discussion but it does show that the service provider is confident that Altyn is a good investment and that the Altyn management are eager to preserve cash, to spend on important mine infrastructure presumably.
TAF, I doubt the sum owed to the service provider was as high as £156,448. The SP has only got to 1.5p in the last week and I would expect the agreed price to be lower than 1.5p....probably nearer 1p (pure guesswork).
So closer to £100,000 I expect...still a big bill. And better for cashflow to issue shares.
More interesting was a third party company willing & able to have such a large gamble (ahem...investment!!). Obviously we might see a sale of 10,429,930 next week if the SP remains strong (although there might be a lockin period).