Member Info for extrader

Hi da95649,

Moving from GT might be considered a de-risk because GT were asleep at the wheel at the time of the Parmalat accounting scandal , see https://www.independent.co.uk/news/business/news/parmalat-scandal-web-widens-with-a-further-seven-arrests-84575.html

There are two points to bear in mind here, IMO :

(1) Crowe Global are a franchise auditor, of local auditing firms.

(2) GT's statement that "there are no circumstances in connection with its resignation as auditor that should be brought to the attention of the Company's shareholders..." is actually pretty meaningless, given that they don't appear to have been asked to perform an audit function , see the 30th June RNS :

.."The Directors have SHARED all the relevant working papers with their accountants and auditors.."

followed by

"However in accordance with the FCA's Disclosure and Transparency Rule 4.2.9(2), the Directors confirm that these interim condensed consolidated financial statements have NOT been AUDITED OR REVIEWED by auditors pursuant to the Auditing Practices Board guidance on Review of Interim Financial Information."

ATB

Hi sidpanesar,

.." I also wanted to state that with a bed and isa you will temprarily be out of the market. .."

Yes. But your broker is on both sides of the trade (there's no net movement in shareholdings), so will usually give you (a) a tighter spread than normal bid/offer; and (b) you won't - or shouldn't - be out of the market for more than a few seconds at most.

ATB

Hi Weathergeek,

" How often have you read an RNS like that??"

Never.

We're told on the one hand that " the Bank will be given pre-emption RIGHTS " to take part in funding (which suggests an arm's length relationship), which is contradicted later in the RNS - and in subsequent references to 'captive bank' - by

(a) "the Bank will remain INDEPENDENT [only of SYME] , owned by the Financial Partner and the Co-investors. .... CONTROL of key operational roles will be given to The AvantGarde Group [who owns TAG now ?] who will be responsible for selecting the Bank's CEO, whilst governance supervision will be overseen by the Financial Partner"; and

(b).."the Bank will also be the "partner and banker of trust" for SYME, whereby all bank accounts set up for inventory monetisation transactions will be held at the Bank. This will serve to reinforce monitoring processes, digital integration and security "..

So AZ + will have significant influence on/control of the origination/sourcing of business (including credit-checking and due diligence), via SYME; the security arrangements, via StockCo; the funding/selling to investors of the related paper, via SYME/Private Bank; and the financial through-flow, via Private Bank; with " governance supervision ...overseen by the Financial Partner".

With the best will in the world, there are a host of potential conflicts of interest here. Maybe you think there aren't ?

The question of 'true sale' accounting hasn't yet AFAIAA been convincingly put to bed....and unless the Central Bank /regulatory authorities are similarly 'captive' - always a possibility, granted - I think AZ+ being involved at every stage of the process will give pause for thought.

IMO.

Since you like classical quotes (thanks for the latest, my American partner will be particularly amused), I wonder whether you're familiar with ' Parturient montes, nascetur ridiculus mus.'

I totally 'get ' the concept, have reservations about the execution.
Time will tell.

ATB

...and the qualifying 'but'...

.."And there I go, coloring your perception again… because those are two insanely successful examples, so I’m feeding your brain with the survivorship bias that so often impacts our thinking about investing in smaller or startup companies. Our minds are drawn to the success stories, to the winners, but lots of startups have that kind of a vision and still never go anywhere for any number of reasons (wrong idea, wrong time, wrong management, bad luck… you name it)… so a lot of startups that sound stupid and foolish when you first hear about them, do, in fact, turn out to be stupid and foolish and never make any money.

What’s survivorship bias, you ask? The short way of explaining it, in an investing context, is that it’s trying to judge how things work by only looking at the winners… it’s too easy to look back and forget the invisible participants. We rarely look back and wonder whether it was smart to buy Google, because it was obviously a great company and became greater still in 15 years in the public markets, but their success was not preordained and they were not the only company going after their core search engine market. It’s very, very easy to forget the dozens of other search engines that failed to gain traction, either because of product or leadership or bad luck or timing, and did NOT become Google.

The origin of that line of study, by the way, involves actual survival — Abraham Wald is widely credited with the first notable studies that addressed survivorship bias in World War II… he was a statistician at Columbia University.. trying to figure out how to minimize the number of bombers that were lost by changing the design of those planes in some way to protect them, and the information he had to work with was the damage that returning planes had suffered. His brilliant and somewhat controversial insight was that they should add armor to the places where returning planes had NOT been hit, partly because he used that to infer something about the more important but unknowable data set (where had the planes been hit that did NOT return?) His realization was that the damage suffered by returning planes who had been hit was obviously survivable, the damage those planes had incurred, surprisingly enough, was not the problem… so the more likely way to improve results would be to armor the areas where those surviving planes had NOT been hit by enemy fire. I can imagine having my mind blown by that concept if I were head-down on a drawing board trying to figure out how to make planes better...."

Not easy, this investment 'game'....;-<

ATB

Hi all,

It's the weekend, so here's a fortuitous extract of a good write-up ex stockgumshoe making the case FOR investment in a start-up. SYME ticks a lot of the boxes.

.."to buy these kinds of companies, you have to be able to look beyond the numbers… and that means you’re taking additional risk, but you’re also maybe seeing something that other numbers-anchored investors can’t grasp. That part is more art than science, which is where the challenge lies. We know good art when we see it, but we don’t all see art the same way.

..it is especially easy to be critical of startups, since almost by their nature they are financially nutty as they try to build themselves to compete with large players, and the best of them demand a fair amount of evangelism from their founders and early backers… and, on the flip side, a big dose of faith from their small investors. Investors often fail to have enough imagination (or faith) to see a possible disruptive future in these companies — and usually that’s wise, but not always.

So in these kinds of cases, the investment decision is really not quantitative — there’s no way to look at XXX’s numbers and say it’s worth $3.7 billion, given any clear value in the business or their near-term growth trajectory, you have to be able to look at it qualitatively and say yes, this company is doing something that’s obviously better, and there will be demand, and their offering is so much better and different that the market is going to be dramatically more lucrative than it initially appears. I can’t get myself there, but perhaps you can.

That’s the challenge with this kind of investing — either you “get it” for a particular investment, or you don’t. Either the idea of renting out your couch to slackers sounds stupid, and you pass on an early investment in airbnb, or it sparks in you the notion that a network of private rentals might be a huge deal, and there’s abundant demand that could expand once there’s more supply, and that will rise exponentially as the quality of the supply improves, and that supply improves because the demand has been aggregated to make it easy to access, for a virtuous circle of rapid growth. Either you see the taxi business being stable and you laugh at the advent of a private competitor that doesn’t even control its drivers, or you see that the addition of a better on-demand service model will dramatically increase the amount of urban paid rides, and you back Travis Kalanick’s vision for Uber..."

That's the case FOR....and SYME ticks a lot of the 'boxes' that Gumshoe mentions.

Part deux that follows is the inevitable 'but'...and an interesting historical explanation of 'survivorship bias'.

ATB

Hi Hvivo,

Maybe GG1111 was thinking of ' a fat accomplice', you know, that well-known coronavirus co-morbity...;-<

I'll get my coat.

ATB

Hi Longlad,

.."another clear indication that the China Oz relationship is further sinking to new lows.
Still holding out that this could be our saving grace..."

Zanaga better get a move on, then !
VALE is doing some kicking of its own..
https://www.mining.com/vale-enters-jv-to-expand-chinese-port/

ATB

Hi Chalker,

A lot of those expenses will be SG and A , no ?
I was thinking specifically of the IP-related Strategic Goals issues , Section 5.4 p 45 of the Prospectus, though I appreciate that , in some quarters, this is considered 'old news' , may have been overtaken by events and - in any case - was probably more a statement of intent than a firm commitment.
Agree that on-boarding fees are likely non-refundable - and presumably revenue recognised over 3 year contract life ? - do you understand them to be in addition to the annual service fees or ofsettable against them ?
No-one AFAIAA is sure - or at least, able/willing to provide support for the view that they are separate.

ATB

Hi Trader_3

Thanks for this !
Governments have ‘form’ for trying to bury bad news, it’s reasonable to expect them to try and spin this development in the most favourable light, at the most favourable time.
I wonder whether the Imperial questionnaire was a kind of focus group approach to help manage fears and expectations .....and a bit of CYA ? ....Imp has taken a fair bit of flak over the Ferguson side of things and may be wanting to present itself as more ‘consumer-friendly/ approachable’.
The MSM are always looking for a new source of headlines ;-(

ATB

Me again,

I would have added IMO, as apunter2 has urged, but these are facts, not opinion...so I didn’t.

Lol.

Hi Chalker

I agree the general thrust of your comments, but with 2 qualifications :
- I think you’ll find that SYME Italia’s numbers showed an IP spend of € 1.5 million over4 years; and
- most of the £ 2.2 m Placing proceeds ( apart from placing costs £ 800k) was said to be destined for further IP spend, from IPO through to end 2021/ Q1 2022.

So - on the few ‘hard numbers’ we have, - an IP ‘spend’ of about £ 3 million.

ATB

Hi apunter2,

It's sometimes hard to distinguish between C& P and c**p.

Why not come up with something original instead of just regurgitating uncritically ?

ATB

Hi jonesrichard,

..."We are in very special company as you see from the article below:..."

Glad to see that people are now acknowledging the link is to the Evening Standard and not the FT. OK, both are pink, but still..

I think you'll find the metric used here is volume of shares turned. So SYME is right up there with BPC. I don't think that was the intended impression.

ATB

Hi ivans,

There wasn't a placing. The last RNS told us that SCM had sold about 5m of the first 7m tranche. There is no 'conversion'.

HTH

Hi Trader_3,

I've passed to my 5 younger generation family members, some for the science, some for the money, some for the experience of 'giving back'...

ATB

Hi Weathergeek,

Life is usually more complicated - dare I say ‘nuanced’? - than the MSM would have us believe.
My partner is American, as it happens, so I have to be careful how I comment on some things.
When I told her that Bill Clinton had interrupted an election trip to go back to Arkansas to sign the execution order for a mentally deficient murderer ( because it would help electorally), she was surprised. I was foolish enough to double down and say that history would probably look kinder on LBJ than on JFK.....;-(

Very few people/ things in life are as bad ...or as good.... as they seem. But most of us like to save time and just pigeon-hole.

I’m tempted to call out ‘Fake News !’.....now trump that !
ATB

Hi cahoodle,

Thanks for nuancing the 'new news'.

ATB

Hi Weathergeek,

(1) That's the trouble with RNS's, they only tell part of the story : "From the RNS we can see £2.3 in revenue..."
But approx £ 400K of this relates to the prior reporting period. So already 20% off.
And as to whether cost-covering or not, between 2 posters we have a range of '50% profit margin' to 'I don't think it will be loss-making'.

(2) OTOH, your observation that '" the SYME service, as its a service, is .. taking over stock control for clients with a new modern technology platform " is certainly something I (for one) had not appreciated..and the only really 'new news' of the day, for which my thanks.

ATB

Hi apunter2,

.."F me .. give it up as we are now 7 months listed hahaha.."

I used the Prospectus because that's the only publicly available document that discloses commission arrangements.....

As a moment's thought would have made obvious.

ATB