Member Info for devonplay

"Such a trade would not be normally counted in the overall day's trading."
We'll just pretend it didn't end lower then :)

Am a bit surprised that that 2m trade did nothing to the price at the time.
It did, it went down just over 2%
FOMO, it's an investors biggest mistake. Given the history of this stock I'd want to see a period of growth and profitibility before being worried about missing out.

It has now. Downwards.

"5 year chart looks rather unhealthy"
5 year, 3 year and 1 year. I think there is some positive news in there, but I don't just see a recovery anytime soon.
Losses have decreased, but so has turnover.
I'm in agreement that sitting on the sidelines is probably the best strategy.
My aim will be to average down into any momentum and exit. I just don't see an momentum at the moment.
Lets see if some one has spotted something the market has missed. They may or may not come back for more.
I note what ever that transactiosn was it so far hasn't moved the price.

"After a bad moth month with SXX and Thomas Cook, you think I would learn about risk. LOL but have just topped up this morning, Maybe no return until the end of 2021 but can see a glimmer of light at the end of the tunnel.
Glad I dumped all my TCG before the weekend."
Do you mind me asking what attracts you to shares like SXX & Thoma Cook given they are so very risky? Is it becuase the they look cheap or the price has declibed a lot, like this one, or something else?

"they are ahead of shareholder when the 's' hits the fan"
Year they rank in the cap table, so in liquidation they get paid out first if there's anything left over. They also benefit from shareholders providing risk capital. If company need to raise capital it usually seeks it first from shareholders, that to some extent reduces the risk profile of th bond.

And aren't bonds more secure than shares? Aren't their funds guaranteed?
Depends on the issue. They can be secured, unsecured, AT1's, PIK's there's a whole ecosystem of them. Remember the markets twice as deep, at least, than equity markets.
Most bonds are issue only to instituions, with market sizes of 100,000 - 200,000 a throw. Retail investors can buy them if you've go the cash, ie £100,000 at least per issue or via ORB (through your stocbroker) on the LSE or you can buy notes in the bonds via WiseAlpha.

"they would have offered a higher yield,"
I feel if they'd offered just slightly more they would have got this away, you could be correct that if they have great Q3 they might be back at the table with a lower rate. Either way, my opinion is they'll raise the capital.
There are lots of other financiasl offering high yield in the debt sector, for example. I've got a couple from businesses I rate. The highest being an 11% coupon. Lowell's November 2023 Unsecured is a good example coupon, yieled and YTM all 11%.
I'd be a buyer of the common stock at these prices.

"GET A GRIP"
Lol. It's like that thing from McCarthy's America.
It's not a red under the bed, it's a hedge.....some people find them every where they lose money.

"but is this oversold and an overreaction? yep in my opinion it is"
I think starting to believe there's value here now. I don't ever see any need to rush, but if it settles at these prices for a while I may go long in anticipation that they'll get a bond issue away and the share price move up.

I just can't abide ****ty city hedge funds, and their smug employees...
Oh dear you have got your pants in a twist. As the name suggests, I'm in Devon and we aren't deep in hedge funds down here. Lol I am a retired private investor.
"You're a paid troll " LOL what can you say.

would you buy new bonds when the current issued bonds are offering 9.55% if held to redemption?

For any number of reason: liquidity for example. Duration.

You are not accounting for the redemption price if held to redemption. trading currently @76.
Hold to redemption and get the full 100 par value back, that increases the rate if held to redemption.
Hence 9.55%
may not be an expert in bonds, but I am well aware of the basics.
There is difference btween coupon, yield and yield to maturity.
The yield on the existing debt is 8%, the yield to maturity 10%, the coupon is 5,5%
Bond markets like consitancy, hence they expectation the real yield is a good indication of future coupons.
They case that existing bonds trade below par doesn't mean that new issue are driven by the YTM, but it does potentially effect the coupon of future issues.

Exactly........but a bank offering bonds at circa 9.55%, to match the yield on the other bond issue.

There's a difference between the coupon and yield to maturity.

Trading @ 76, assume par was 100
Coupon 5.5%
Hence, actual Yield 9.55%

I make just it under 8 % and the YTM just under 10%, so as I said earlier they might get that additional £25m with just a small increase in the coupon. They could still get it away when they return to the table.

Oh, and the bond price dropped over 8% today
And that tells you somethibg doesn't it? That the equity feel 35% and the bond just fell 8%, that's possible to get this away if they offer a higher coupon. The equestion is how much can they afford and how much with the market expect. The running yield on the exsting debt might give us a clue.

They trade like shares once sold.
No quite, they are tradeable, between institutions mainly. I didn't read the prospectus, but you'd expect the average trade size to be between £100,000 and £200,000. So institutions and high nets.
If you understand these matters you'd realise that they would not have got away at face value, but heavily discounted. due to the undersubscription.
That's conjecture, they may have traded below par if they went ahead. We can only guess.
Barclays were 7.5 times oversubscribed.
There's a world of difference between the two. It's pointless trying to compare the debt of Barclays and Metro.
Hence if not over subscribed letting them sell would not have raised the desired amount.
We don't know that, because we don't know on what basis the book building happened.
The point is they have to do something, so they'll be opening futher discussion. Everything has a value, including on what basis lenders will proceed.

For clarity I hold the 5.5% June 2028, which I bought below par.

"If they can't get away raising GBP 200m at a 7.5% coupon, then that's a really bad sign. Clearly the debt market don't rate their chances highly, so why should equity holders?"
They got £175m of the £200 commited. The taget raise was £200-250m. In that context they should be back to the table again soon. Plenty of other "financials" pay higher coupons. Maybe another 0,5% will be enough, maybe a combination of debt and equity. I've never fancied the equity, but at these levels, under 200, it's starting to look attractive to value investors.
£175m only left a small shortfall. I maybe for once a buyer of the equity.

Sensible approach. Could take a few years.