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So it appears that no-one can provide a credible explanation for why at the AGM only 31.8% voted in favour of the resolutions when AZ and DW supposedly hold 42%.
Does this not bother the more open minded holders - such as you wolf?
If tradeflow funds under management are USD40m as quoted by Bloomberg then it is unlikely to be breaking even - given gross margin at say 2% would be less than USD1m and corporate costs would likely exceed this amount. But 40m of funds under management is 40m more than syme currently has.
What does syme have that tradeflow doesn't? An overvalued, and listed, share price. That's why this deal makes sense to syme. They get to buy a small business with a viable business model. And can use overvalued paper as consideration. What will be interesting to learn is the restrictions on sale of syme stock that the sellers of tradeflow receive. They won't want to be locked in for a long period. But if there are no restrictions they will want to start selling some of these shares - which will lead to further pressure on the share price. They are industry experts and will be well aware that syme has been ramped and the share price is overvalued.
However the good news, if the deal goes through, is that syme shareholders will at least have some viable business underlying their investment. Let's be honest the fact that syme has yet to complete a single transaction, after a year of trying, suggests that their current business model may not be viable. I knew that at some point I would be able to post a positive message.
@cantclough, I always think that I'll have something positive to say. But then there's just another delay or another failing. This latest revelation over gross originations including lost opportunities is just pitiful. What credible company would do such a thing?
@havoc, I also find it very convenient that because there were 5 new investors the holding by each was just a little less than that requiring disclosure. And therefore also no disclosure if/when these investors sold. That RNS also explained that these new investors may buy more - no TR has been issued so presumably this never happened?
@havoc, you have a point and I think it was always the intention that at some point he would sell down. But in one go and before the first transaction? He would be daft to sell out just before the company was about to prove its concept. But wait that didn't happen did it? How strange.
@luckybob23, there's no point getting frustrated at me. It's critical that AZ secures a funder. To date he has not been able to do so. He actually seems further away now than at year end. In 31 December RNS he explained that documents were about to go out to prospective customers and funder would be named. That never happened did it?
Investors were absolutely right to expect more from the RNS. The RNS issued on 31/12 indicated that SH would be completed in January (after already being delayed since Sep/Oct). AZ tweeted during suspension that work was continuing as normal. And then we find out there is still no funder and no secured customers at 31/3. It's not about investors being too optimistic. It's about AZ not delivering.
The question to be asked is how they get round illustrative example 62 in IFRS15 which states that a sale of a good which is subject to a buy back option is to be treated as a financing transaction. A general partner of a big4 firm would not be familiar with this - it would need to be looked at by the technical department.
I don't think we'll ever get the answer to this. The funding problem will prevent any further progress.
@oldspursfan and doctor100, I've always been sceptical of the business concept due to the "true sale" approach, which is fundamental to the model, being inconsistent with the accounting standard ifrs15. Ifrs15 only allows a sale to be recognised for accounting purposes once control of stock is transferred. This doesn't happen under the syme model. I've explained this at length in previous posts.
The funding issue is totally different. I don't think there is any appetite for this type of risk from funders without someone else taking the risk of first loss. And insurers really won't want to insure this risk given what has happened to greensill.
@cahoodle, we have absolutely no idea what the FCA looked at. I would have thought that yesterday's RNS would have led any sane person to be more sceptical of this company and previous statements made by AZ.
@extrader, you are correct that TF does not have this IFRS problem. It clearly takes control of product.
One problem is that even if SYME does eventually manage to get a few companies funding under its "true sale" model this is not really proof of concept. Proof of concept will only come once the auditor has signed off at client company year end and this has survived regulatory challenge (by regulator over auditor in that jurisdiction). And I'm pretty sure it won't. I know that AZ has indicated that his model has been approved by big4 - but we know that AZ doesn't mind giving the odd "misleading" statement.
As well as being written before the RNS the Motley Fool author does not seem to realise that syme has not completed any transactions yet. "Gross origination" was always a misleading term. Now that AZ has been forced to define exactly what it is this has become farcical.
@MikJnN, I did read the RNS. It is a shocker. And this is from AZ who we knows likes to put a very positive spin on things (ie mislead). So Christ knows what is really happening on the ground (probably very little).
This company still has a market cap of £120m. It has a business plan which does not appear to be viable. And if the tradeflow deal does go through they will of course be paying fair value. So what is supporting the current £120m market cap? The downside risk is still massive. It is still significantly overvalued.
No funders, no customers - but is anyone really that surprised?
A very small number of posters on this BB have been pointing out the difficulties facing this business for months. But they have been drowned out by idiots.