Member Info for DC2007

Got to add to Franalex's sensible point. Extraordinary delusions and the madness of crowds are beginning to assemble. Already someone below suggesting a takeover bid as high as £1.50 a share. Easy money...5x return on investment...afford a nice La-Z-Boy with the proceeds - perfect for watching the cows fly over the moon.

One of the RNSs implied that without immediate funding, they were about to become insolvent. That I think explains the desperate and rushed machinations. It also provides a convenient excuse for rebuffing MA's offers on two grounds. First: 'we needed immediate funds or we were bust'; and second: 'the funding offered by MA was insufficient in quantity'.

The BoD will be able to hide behind this reasoning and fudge it that way. They'll probably never have to explain to former owners their actions, or why said owners lost all of their equity. Sergio stepping down is a logical step for him since any action or investigation will then be frustrated by his severing his connections with DEB and lying low on holiday for a few months.

Atb

Agree BIBU that's a frustrating place to be in. Averaging down for the sake of averaging down is a mugs game and better avoided.

ATB

Yes it has ebbed away quickly since January BIBU. Does it not worry you since there is nothing obvious to explain that? Conspiratorial theories about market makers never seems a good explanation. Two-thirds decrease in three months means that there is no demand for the issue so sellers wishing to transact are forced to accept a lower price.

Atb if you have a stake.

It is at a discount to it's present value, justifiably given the risks involved. But 45-55p is way above that present value. How did you get to that?

Withdrawal of the trade credit insurance and the appointment of KPMG were the two big signs for real trouble ahead. I was wary of both but incorrectly chose to ignore these as clear sell signals.

We've been at odds once or twice Pearls, but I'd like to echo your appreciation and extend my consolations about the loss. Time and distance soften these disappointments and a new perspective is obtained. Good luck with any future investments.

Atb

I remember seeing snippets of the meeting too. I couldn't decide whether what he was saying was trustworthy and sincere, or hyperbole and part of a game (like the highstreet being 'smashed to pieces', in November). MA is an unconventional and unpredictable character and thus I tended to disregard his input.

Plummeting cash-flow is probably the cause and what gave it to the creditors. The debt will have had covenants and DEBs declining revenues, squeeze on the working cashflow (credit insurance), the overspend on the ineffective Redesigned, the increasing rents, and all these problems unsupported by a business with intrinsically narrow margins. There was so little room for mistakes or delays. They made both and were toasted. The accelerating speed of the decline surprises me. The lack of transparency from the BoD about it infuriates me.

They must have known the iceberg was becoming increasingly unavoidable long before they said so. They kept saying things were 'tough', but changes were 'gaining traction' and the business was still 'cash generative'. Clearly all weasel words - legally insignificant, but ethically contemptible for leaving truths unstated. Insulting to all investors whose trust they have betrayed, even as the ship sank.

Yes Poker, that for me too is the far more relevant question. The MA/bid/legal angle is a red-herring. But how the BoD wrecked this company in such a short time (one of the RNS implied that the £101m was immediately needed to prevent insolvency) is not. They need to face some music about that.

There's a pertinent chart on a BBC article showing DEB earnings over more than a decade - it's doing fine until SB and his 'management' were installed. The link: https://www.bbc.co.uk/news/business-47864580 The chart is towards the bottom of the article. A small loss in earnings was posted in 2004, but otherwise quite steady until very recently. Debt was coming down at the same time. How on earth did it go from £275m to £640m in a few months.

Management: have you the decency to explain to former owners how you reduced the value of their equity to nothing and take responsibility for your part in this?

On a slightly different angle, I do view with scepticism MAs actions and statements up to the pre-pack. There seemed minimal real intent to actually do something: he was shaking the tree on the off-chance of generating panic and thus something more favourable (for himself) than exceeded reasonable expectations. He had nothing to lose in doing this - it does not prevent him from acquiring bits of DEBS from the creditors for far less. He was hedging, and the post pre-pack follow-up just draws the narrative to a conclusion and keep it credible.

With my stake basically worthless, there was no point in selling as I would have lost the potential opportunity to exit on a spike if one materialised. That was my reasoning for holding. It concerned me that some were buying or holding substantial stakes. I responded to a few and said the risk of 0 was so large and they should reconsider their position.

It's difficult always to admit to oneself to being so thoroughly wrong. But it's necessary to be able to, firstly, move on; and secondly, learn from what happened. The board here in the past few weeks displayed all the characteristics of when a company is in dire straits. This pattern will doubtless continue for as long as there are people willing to try and speculate or invest.

Atb

Does anyone know if they've made any comments or statements?

Thanks for the considerate words TrueBlueX. I'm responding in slight alarm that you have all of your invested capital in a single equity, Lloyds. That, IMO, is way riskier than it appears. I lost all nearly all of my stake in one of the supposedly safest most prosperous issues - RBS.

Agree that investing what you can afford to lose is key principle. Even that is more slippery than it first appears since that amount could change based on changes in your life which you cannot foresee.

All the best with your strategy.

I have never ever seen an RNS like 1539 SPD one. It's extraordinary.

These are good principles, however back in 2016 when I bought in, DEB's debt was well down and reducing YoY and their pension fund was in surplus. Those two metrics were part of my decision to invest.

The debt has only ballooned very recently - in the last six months or so. During this period the BoD kept insisting the business was cash generative; Sergio made statements to the press expressing his confusion at the low market valuation; the business was 'pressure tested' and found to be able to weather the most severe scenarios, and I could go on.

The BoD (including Ian) will never be required to explain any of this to shareholders who trusted these statements. Nor will we ever get to know if they were lies or not. Nor will we get to know what the position of the company was over the past couple of months and how dire it really was. We get a lame statement stating that it's business as usual, but those whose funding allowed the company to exist are left with nothing.

BoD still pick up their six figure salaries, and remarkably even seem to still have jobs. Have they never heard of resigning? Silverpoint and others who now own new DEB surely do not want any of these people in charge. MA can make noise but that'll go nowhere. Probably a bit later down the line, it'll come up for sale and he'll buy it from the new owners.

A conclusion might be that informed equity investments are not possible for the private individual. It has an allure which, like most alluring things can prove seductive. Dumb index funds over a long time period have by far the best chance of success.

ATB

We're no.1 story on the BBC News website. Wonder what MA feels like...£150m gone with nothing in return.

The past six months here has seen some extraordinary posting.

Those who incessantly stated the business was doing fine; that administration was impossible; that walls of money were about to materialise as rampant buying. We had those saying MA would certainly buy it; those saying the SP would be back in the 30s in just a few months; those claiming the SP would appreciate 4-5x in a day or two.

Where are you all now? Would you like to acknowledge your comments? They will have influenced people who will have lost money based on these posts. Did you follow your own convictions and also lose? How much? How do you explain it? Even now, there are posters below who still say it's going to be pulled out the fire...time to snap up a few more shares while they're cheap. It's over. Done. Wipeout. DEB hold all the cards, MA or anyone else, none.

Pearls,

DEB is probably going to put themselves in a pre-pack this afternoon, then all the other aspects of the situation you mention are moot. Do you not think this is most likely? The BoD seem utterly determined to wipe out all shareholders.

Dreadful, dire, disastrous...I run out of descriptors for how appalling this BoD have been for 24 months. The worse things have got, the worse they've become at investor relations. I actually think MA would do a better job.

1.72p. Came back a touch from the sudden drop.

It's only an RNS from DEB that can clear up how this ends. They'll either say we're going pre-pack, we're extending the deadline, or we accept SPD offer to underwrite an issue or buy the equity. First two are far the more likely and I'd put them at about equal probability of 0.4.