Member Info for CJohnSpain

So CRV now owns 31.5% of a heavily loss-making Florida-based fintech company which provides funding to commnity associations in exchange for the ownershhip of said associations' delinquent debtors' accounts.

They bought the shares at a 35% premium -$2.40 per share - to the then market price.

However, looking back over LMFA's share price movement, it was at a high 0f $89+ early 2017., some time after flaoting

this is a fintech company's whose shareprice has crashed to earth when fancy ideas have smashed into contact with financial reality.

Good deal for CRV?

Hi Tully Crow,

Thank you for your long and well-reasoned post.

I'm sorry, I wasn't aware you didn't get out much; I'm guessing this might be because of a health issue. Whatever it is, I do wish the best for you.

(I myself had very poor health over many years, indeed I got into investing precisely because I was then unable to work. Now I don't do a conventional job, out of choice.)

Your highly conservative valuation of $13m is indeed still at a premium to current market cap of around $8m. My feeling is that the company's own valuation of $24m + is itself conservative. So we're trading at below a third net tangible book or at a 40% discount on your fire sale valuation. I see such valuations all the time; precisely because I seek them out. That is how I opérate. So it doesn't surprise me; and complicated and sometimes conspiratorial explanations are almost never the right ones. All such asset-play companies, however, have issues. there, CRV is no exception.

A lot of the problem at CRV arises, in my view, from the shoestring nature of operations. There are currently what? two employees, who are the directors. And they hire secretarial services to get out the reports. Often it seems to me, they don't have enough hours in the day to attend to shareholder concerns or to dot the the is and cross the ts on some of the compliance issues. Hence too, the delays between intention and action. (On a positive note, this reduces operational costs..)

There is obviousasset value here; but will it crystallise for shareholders in a reasonable time frame?

All the best

CJohn

Hi Tully,

the trade has appeared. 2.53k at 9.54am.

Regarding the share buyback, it will be done in the open market at prices up to $10. It's only going to happen post-approval and post- asset sales.

The $5,50 story is an amusing one, the chances of it being accurate are low.

We all know the reasons why CRV is trading well below tangible asset value. Some are specific to CRV - its unusual assortment of assets, its investment strategy that puts off nearly all investors, the opaquenss of some operations. etc Some are more general: small company off radar etc

So other companies can and do trade below tangible asset value for all sorts of reasons This offers an opportunity to make money. If there weren't such pricing anomalies, no one could make money on the stockmarket. it's not uncommon for an announcement of some crystal-clear realisation of value - at least at small obscure companies- to produce no reaction in a share price. i've seen this again and again. In the case of CRV's announced buy back, the realisation of value isn't cristal-clear, as there are still a couple of hoops to jump through, so investtors are waiting to see.

Great spot, Rusty.

Gyllenhammer is an activist investor who will have doubtless drawn the boards' attention at both CRV and TREE to the economic benefits of buying back shares which are trading at a discount to tangible asset value.

In the 20 years I've been investing, I've had shares in perhaps a dozen companies where Gyllenhammer has been on the share register. In a fair percentage of these - but not all - significant corporate activity of one sort or another has followed.

It's a clear plus having him on board.

Ah, those masters of manipulation, the Grey Ones, are at it again......

Hi Tully,

Most investors don't give any importance to - or even necessarily understand -asset value.

My experience of investing in deep value shares is that they can remain unloved by the market for a long time. For most investors too long.

Add to that that CRV is a particularly exotic animal: enough to put nearly all PIs off.

Have a good afternoon.

Yes, the last trade at 13 cents. That's up 44%. WOW! The market cap of DLC is BOOMing!

Hi Tully,

you see the world in startling technicolour.

Where you see a "crash", greyer individuals like me see a sale of 2800 shares at 9 Canadian cents, a grand total of around 147.49 sterling.

Surely tehre are enough other things to get hot under the collar about.

He was brought in when it looked possible there was going to be a step change in the size of the business (es). This, as we know, didn't happen.

Hence, in my view, it's not negative that he's gone. Even if his heart was in it, his pocketbook wasn't.

Could I suggest that somebody from amongst the PIs puts their name forward as a non-exec (or even Chairman?)

Hi Tully,

they don't need the shares to launch a bid. ( and if they did want to launch a bid, they could do it at the current pricer than first pushing up the price at which they'd have to buy the remaining shares. That indeed would make no sense whatsoever. )

It makes investment sense to buy back shares at a discount to tangible asset value; this is true for CRV or any other company. It increases the discount to tangilbe asset value for the continuing shareholders and is sometimes the best use of spare capital.

Hi Tully,

No one - including management themselves - can think they will be able to buy up $5m worth of shares on the open market: For starters I don't think there's $5m's worth of shares held by non-large shareholders.. So what they are doing is declaring an intention to buy up any shares that do become available - assunming asset sales

Ths is clearly positive for shareholders. Even if they only are able to buy up say $1m worth, this will psuh the SP up towards $10. It should also provide more liquidity for anyone wanting to get out.

Hi Rusty,

I agree wth the reasons you put forward as to the lack of large amounts of activity post announcement of the plan to buy back shares.

There are other reasons in my view:

!. the share is very little known

2. The expressed deep value philosophy is not popular; indeed causes suspicion amongst most investors. ( I don't share this suspicion; as it's my own philosophy.)

3. before buy backs begin, there have to be asset realisations. So there may be doubt as to the ability of CRV to realise assets in a reasonable time-frame. (Again, I personally think they WILL be able to realise assets.)

irrespective of all these reasons, the announced buy back program can't be denied, even by the fiercest detractors of CRV:; it's a reality and a very postive move to shift the share price closer to the tangible asset value.

all the best and thanks to those attending the meeting tomorrow

The company won't be able to buy back enough shares in the market to reach the limit of shares they've set.

That doesn't matter: it's only a limit. The effect of the buying will be to move the price towards the $10 per share limit. This is obviously positive for ALL holders.

If they wanted to take it private,they could have offered to buy shares at a price well south of $10. So that idea makes no sense.

(But let's suppose for the sake of indulging conspiracy theory, they buy shares on the open market at $8, then suddenly there's a dastardaly change of tack and they decide to take the company private. Then the offer to remaining shareholders would have to be at $8 mínimum.)

Hi Tully,

"No material impact on Craven House" suggests that there certainly won't be a "huge legal bill". Indeed, it may be that Sretaw paid CRV's legal costs. They came to some sort of arrangement; that's for sure. It would be interesting to know more...…..

last buys in DLC at 23, last sale at 20. as i've said before, spreads in very illiquid companies need to be taken with large pinches of salt. Look at the implied value of the Brazilian land when ti was held directly in CRV and the implied value now. This has been a positive move; and could faciliate a sale of said land at some point. (ie CRV offload its holding in DLC.) in moving, the land into DLC, CRV reduced its holding in the land in exchange for a share in other DLC assets. that was PROBABLY a good move too.

all the best

CJohn

ps happy to be in the cool of northern Spain

Most recent trading at 23 cents.

Makes CRV's share of DLC worth around £11m. Current CRV market cap £7.2m.

Hi Karina,

Excellent research as ever. Thank you.

God?

Ok, I stand corrected, Karina.

I have several very illiquid stocks in my portfolio. One i am currently selling off. it's taken me several weeks so far. The prices I have traded at have all been close to the mid-price and far better than the ludicrous quoted spread. This is my typical experience with such stocks. Obviously, if I'd wanted to sell the lot on day one, The MM would have gouged me.

Out of hours spreads in illiquid companies should be taken with several barrels of salt!!

I prefer the board (all 3 of them - 2 really; Burrows just a figurehead?) to worry about the business, rather than try to conjure up liquidty, where there is little interest.. The fact is they've got their work cut out as it is.

(And this, in my view, PARTLY explains the corner-cutting on keeping other owners informed.)

Hullo Tully,

.Long time since anybody's called me a decent btoke. Thank you, You have made my day.

I notice that yesterday there was another trade in CRV, this time at a princely 15 cents. At 15 cents, CRV is valued at around £7m. The point I'm making is that these tiny trades should not be taken very seriously. The point we do agree on is the lack of interest/liquidity.

So CRV has actually paid out dividends. I didn't realise that………

.Maybe you could check back as to the percentage of Pajak's holding that has originated from fees. My bet is that's probably less than you imagine.....

Anyway, of course, Mr Burrows should buy some more.

all best

CJohn