Member Info for DC2007

When it's going to dip below 0 and holders have to pay to sell.

Wonder who they sold them to?

Me too. Must be strong stuff.

It does seem an overreaction. OFGEM pull many strings though so maybe that's why investors have shed these today, albeit in a steady way, rather than a cliff-drop.

Thanks for the response hodl4ever. Best wishes with your position.

hodl4ever,

Hi, interesting perspectives. If you hold until zero, then you've decided to give away your investment rather than cut a loss. Why do that?

I am a holder and I agree at least that it's high risk. But it's risk without the requisite reward that a rational investment should be accompanied by. No way would I buy this. Pearls says it's a bargain but doesn't say why. The last annual report is dire and is peppered with allusions to the seniority of liabilities in administration scenarios.

I'm a layperson without any accountancy training, but really, what's so good in the balance sheet Pearls? Please explain what I'm missing. The book value of the company was in one go near sliced half in while debt went up!

Speculators will still make profits over the short term; the whipsaw volatility of the SP of a company in distress will provide that opportunity. But for the investors, the long-term holders (and such the rapidity of the decline, that's anything more than a few months) still in, it's dead. No doubt they will rue missing or ignoring the clear warning bells that sounded Nov 2017-Jan 2018 — I know I do.

ATB

But Pearls, why not the other side of that argument? Just as easy to say: when are holders going to wake up from denial and realise it's priced so low because its future is so precarious? I like your optimism, I really do. But it means disagreeing with millions of other actors in the market, including those who have far fuller information than a private investor. Extraordinary evidence or insight is needed to credibly dispute what the market is saying.

ATB

Pardon my ignorance MaverickD, but what's a 'gap fill'?

Are you for real lse2000? You've posted loads here celebrating every new low and hoping for Debs to go bust. You're full of sh**.

Thanks for the link. Detailed analysis and prescient points.

If MA offered this, the implied value of the entire company is £4m x (100/10) or £40m. Shares in issue number 1,227,822,150. So that's a value per share of 40,000,000/1,227,822,150 = £0.0326 = 3.26p

Lots of disposable income is not representative of the population KNIGELK. You're in the lucky minority if Brexit isn't going to effect your income or standard of living. A whole generation is going to be squeezed by increased prices and reduced earnings. You might even end up with some negative equity on that mortgage if house prices tank.

More hearsay without any attempt at reason or evidence from lse. Latest warped logic means they believe at the current price it's trading at ~5x premium to it's true value...because it's 5x more than what they claim it's worth. lse's favourite shape? The circle.

Yes the spectre of nationalisation does no good to the defensive utilities. In fact anything that makes a lot of its revenue in the UK is under the cosh until there is a roadmap to Brexit at the very least, or until Article 50 is revoked and the dust of that settles.

Atb

Agree that the general drift downwards will continue. Could see another sharp sell-off (> 10%) on Wednesday though if tomorrow's vote portends economic gloom.

Hi Pearls,

As concise as possible in answer to your question: the market thinks DEB is in a perilous state and at real risk of insolvency.

To add a bit to the above, the essential context is the decline in the SP over 12 months. Losing ~90% in value means the company is in severe distress. Some other factors at work maybe, but the crucial point for anyone longer than a year is that loud indicator from the market.

Atb

Not quite. The most recent short movement was a small increase to a position held by Marshall Wace. For the past month or so, the overall shorts position has been below 10%.

Great link upside, thanks for the read. That post has so much nailed for the private/retail investor. Atb

Hi caddy1,

Unless that is small change for you, putting such a chunk into UK equities right now is so risky. Would you be comfortable to see it half over the next 12 months? Spread it out over some international stuff and some different asset classes unless you have some unique insight into Aviva. What is so good about Aviva? What makes it compelling?

These are my thoughts regarding an investment here, but each to their own and good luck of course.

Hi rxdav,

I've had an interest here for more than a decade. I see the sharp sell off over the past six months (from about £28) as caused by the indirect effects of Brexit.

Most UK companies and UK construction in particular has had a similar decline. The P/e's are becoming alarmingly low as yield is driven alarmingly high. All, as you point out, whilst fundamentals remain very impressive. Investors and the market therefore are pricing in the possibility of a decline in house sales due to a contracting UK economy overall. This in turn would reduce the assets on these companies' books.

The nearer the deadline gets with so much still uncertain, the more the market marks these down. If the Brexit situation resolves favourably, I'd expect these stocks to increase solidly. Further prevarication or lack of any deal and I can see another 1/3-1/2 disappearing from their market value.

The Leave vote will damage the UK economy for a generation. The only question to be settled is, how badly?

Atb