Member Info for bluetigeruk

A share buyback would reduce the amount of cash the business has to stay alive and / or reduce the headcount significantly to something that represents the revenues and gross profits. Basically you would accelerate the problems. The market values this as a scale up business that is not scaling up - so its trading below NAV - if you think they have a product that will deliver revenue growth then hang on - if not sell and take the loss. I thought that covid testing would be compulsory at every airport for commercial travel for the next 10 years - like 100ml bottles in plastic bags - and NCYT would be a leading supplier - my future gazing did not happen and so i sold. I understand your pain as i had some too. Thanks Blue

If you dont pay your mortgage your bank has lien on your property and so they own the title deeds until they are made good by a forced sale that they control, thats why when you get a mortgage you hand over the title to your property until its paid off.
Just like Rambler, as soon as they default on their payments due they are in the control of the debt holders as they then take the assets.
They may attract a PE distressed assets vulture fund / recovery fund, but they are professionals at this and squeeze very hard.
Thanks - Blue

The debt in the company ranks senior to the equity - in fact equity has almost no power at all when the business moves into financial problems.
1. Administration - the debt owners negotiate a refinancing package, and that wipes out all shareholders at say around 20:1 - or even completely, but if you own shares you can at least divide by 10 their value.
2. New Debt to provide cashflow - OK so the current debt owners add extra debt, but it will be on a very high interest rate say 15% and at a massive convertible rate of say 5:1 or something - so the current equity holders can divide by 5 to 10 times.
3. Asset Sale - OK so the current owners of the business (thats the bond / debt seniors at this stage) equity have lost control - go to the used copper mine market and sell, but the debt holders have first call on any cash that is raised and the equity owners dont get it until 100% of the debt has been recovered as the other debt and bonds have seniority - so how much would be left?

Most people here have forgotten the company has debts and they need to be added into the equation.

Thanks Blue

P|100 - do you realise the NHS has more funding than ever? Here is the Kings Fund, hardly a right wing consultancy.
Why not put some facts into your statements??
https://www.kingsfund.org.uk/projects/nhs-in-a-nutshell/nhs-budget

Sell your shares to book the tax loss correctly - when they get suspended / administration - which will be very soon - then its difficult to create a tax loss transaction - much harder than pressing SELL - so do it now and save yourselves a lot of hassle.

Thanks Blue

85m on the surface - that means to me extraction can start without too much cover removal costs and so casflow is far nearer.

How does the ore get sorted and separated and then processed?

Is it possible to bring in smaller scale temporary equipment to start the ore cash flows - even if it just covers costs for a while so the whole project can run without additional debt / equity / partners.

Or am i being stupid and the CAPEX even to extract 100m of material and sort it and process it is so HUGE that running a scaled back operation is not a realistic plan?

Genuine questions - thanks Blue

Yes me too - bought in at 35p and just sold at 4.8 pence - lost £4000 recovered £500.
Boo Hoo.
Thanks Blue

No Stenson. These are not CHEAP shares - they are expensive - because any financial restructuring now requires a very large dilutive issue of equity - if thats the direction chosen - or convertible debt. So there is a huge dilution coming to the equity holders and thats why the SP is so low - the market sees it coming in whatever form and is discounting the shares accordingly - or it goes into Administration to protect the business from the debt - and then equity is valued at zero. Both options mean the share price wont recover from this. Thanks Blue.

No worries. As soon as the cash starts to cover costs then any future new share issues go away, and the cash raise and dilution risk dissapers, then it becomes more of a cash flow valuation model. Until then the risk multiplier is high. Just stuff a few in your ISA every quarter on a red day and then in 3 years you will be happy. That's my plan. Thanks Blue

Double Hun. 7m shares is just over £500k it's so small in size it's not going to move the share price unless the market is low on stock. My ISA has more value than that, not much more. There are more than 4 billion shares in issue. And they have just had a placing which the market always uses to fill up any short books. The share price won't move until all that has been soaked up. This is one reason cash positive businesses have share buy back schemes, it keeps the price up. 2024, the price will move ????

Aqua - why would an open short position stop investors from buying - read about Gamestop and Porsche if you want the counterfactual.

What is a short position?

Its simply someone who goes to the market and sells shares hoping to buy them back cheaper in the future .

Once the transaction has been eaten by the market, thats it - the short is now in fact a long waiting to happen in the future when the open position is closed.

Whats a long position? Actually its a future sell waiting to happen as far as the market makers are concerned. Price moves create order flow - they dislodge these longs and shorts as buys and sells. The market does not care about the pace of digging, or massive potential possibilities, it cares about how many buyers and sellers there are in the market at any one time. Thats it - end of. Lots of buyers - the shares rise - lots of sellers, guess what they fall.

Also institutions and serious investors dont mess around in AIM - in fact they are not allowed to by the rules of the funds they run - the trustees would fire them, and serious traders wont mess around in illiquid markets without options cover - so you may think that the best traders in JPM are sitting there trying to squeeze a penny out of GGP for their mates at Blackrock to grab some supressed GGP shares - they are not believe me - they dont care - its too small.
Thanks Blue

The settlement for the tobacco class action was 365 billion - probably double in todays money. The lawyers get 15% to 40% for normal cases - i dont know for bn ++ settlements.

The process is use single claims to establish a legal case to bounce the class action off.

Thats why businesses settle out of court and dont fight all the way, even if its pretty flimsy - so GSK must be rock solid.

Its big business - it makes successful class action lawyers legal superstars and gives them a lot of wealth - esp in the usa - they become the premier league players - its also why lots of such actions get taken up in the USA - this wont be the last if the class action / litigation lawyers see a chink of light they can exploit. But also - its just a cost of business in the USA - that's one reason why their pharma products cost 2 x to 3 x that in the UK - its built into the supplier margins.

Thanks Blue

Sheet what a shame - i have £5k of these at 6p - OK not a problem. What is an issue is their seismic work did not see this - what were they doing ? Is that why the CEO resigned because the financiers have asked the same question - most likely. Or maybe it was never commissioned correctly. I don't know the geology - any geologists out there - what hard rock is under the cover that could require Mechanical Hammer Drills to break it up - i dont have time to check right now - bet its big blocks of quartz. Hopefully not too big - if it is - why don't they just mine around these zones and work out a plan later? Get some cashflow and sort it out in 2 years time. The mine life is plenty long enough to look away for a bit. Anyone got mates over there?
Thanks Blue

I have invested since around 3p in Greatlands GGP and having a JV agreement with a big cap miner has saved them - the problem with PALM is that if they hit something tasty at say 400m - then what? There is probably not enough information on a couple of holes to base any resource estimates and attract a JV etc ... so PALM needs to then drill out a decent sample of say 20 - 30 holes in all directions to validate and expand. That costs say 5 x the current balance sheet, so PALM will come back to shareholders and issue another one or two rounds of equity + warrants which is dilution. So success with the drill means more shares issued and probably more warrants hanging around and probably downwards pressure on the share price for at least 2 - 3 years until a JV is agreed in some format to recover the exploration costs and define the asset value. This is what i have learned the expensive way being invested in GGP and two small Auzzie miners over the last 3 years.
So my new wisdom is dabble a small bit when they are exploring - its fun and exciting - then as soon as something has been found and the share price has a bump, sell - then wait until cash raise 2 or something when the price is weak and warrants converting (maybe) assuming the price justifies warrant conversion - and then look to buy in again.
GGP is exactly in this pattern - even with a very good JV partner and having a massive gold / resource find thats still expanding, plus exploration areas all over the hottest gold zone in the world today.
Good luck PALM investors - i am watching - but not buying in currently.
Thanks Blue

What the chart tells you is that the business is nearly bust - it has restructured its payments to its biggest lender at 14% and kicked them down the line to 2026 - but thats a big interest rate to pay and if it defaults then Sprott takes over in an insolvency agreement - issues some capital for equity on really bad terms to current bagholders - sorry shareholders - and then makes the business and cashflow good - assuming the gold is in there at the correct levels - and then they IPO back onto the Canadian market in 2030. Thats my guess - thanks Blue

Each new company will declare a dividend policy - so the distribution will be pretty clear - then divide that by the NOSH (number of shares) and you get the div p/sh estimate.

Thanks Blue

Yes - look at it this way.

You own 500 GSK shares at £10 - you have £5,000 in value.

Shares are consoludated.

You now have 400 GSK.new shares - they represent the same business, so they trade as £12.50 = £5,000

GSK.old is chopped into more pieces (shares) than GSK.new so the slices are a bit richer - but you have less of them.

Thanks Blue

MADE should make some of its furniture in the UK because it would then not suffer from such delays - plus it would support UK artisans - they could also source in Denmark, Italy etc and have a really cool European showcase.

Thanks Blue

You dont understand what has happened - the shares are up because of maths - its a 4 for 5 consolidation - so there are now 20% fewer shares in issue and so the market capitalisation is spread thicker - meaning the shares adjust by increasing 20%. The value of GSK has not increased. Just the number of shares that represent it.
Thanks Blue

Bought in at £1.12 and sold at £1.10 - possibly my worst managed trade / investment ever.

Good luck anyone remaining - my luck with this share it will probably triple in price now.

Thanks Blue