Member Info for gewillia

Ever the long-term optimist, I look back on my Jan 16th posting about Wise and Starling and wonder if CHRY is now finally turning the corner, as real-world results in genuine cash-profits must chip away at the market's 50% discount to the published NAV. No matter the fact that there have to be some dogs in the portfolio, because that's the blunderbuss approach to private equity. Some pellets hit the target and some hit the cat - You just have to hope that a greater number hit the former, rather than the latter.

Besides, as we're seeing with 3i, if you hit one really big winner, long-term, it will take the entire portfolio upwards with it. Which leads me to the question; do we know what %age of Starling's equity CHRY owns? Is it significant?

Meanwhile, I put the moolah where the gob is late last month and bought a big bunch at 59.5 pence, to greatly lower my break-even price, from 160p down to 120, so days like today are very welcome.

One wildly optimistic punter here has high hopes that Ms. DV "will restore Vod to its former glory." What glory?

Vod engineered the greatest value-destruction in the 21st century so far. Bought out Mannesmann for £105 billion and twenty years later the entire group is capitalised at just £23b.

The entire annual report can be summarised in just two words, "Woof! Woof!"

Would it be rude of me, Chid, because it isn't meant rudely, just a realisation I had a few years ago, to point out that keeping capital tied up in long-term losers merely increases our losses, because Prevent myself from investing in potential winners? I decided to start biting the bullet on paper-losses on stock that clearly wasn't ever going to make a decent profit, by cashing out and finding a better home for the remaining money. This way I stood a real chance of getting my money back.

The result was new investments in III, Segro, SMT, Microsoft, Flutter and others, that have recovered all the past losses and continue to appreciate. III at an all time high today. Losers are compulsory and inevitable, it seems, but losses, especially substantial long term losses, are optional. Just a thought.

In my post below, in referring to cigarettes, I used a slang word, in use for over a century. I'm aware it's also used, more recently, in the USA as an insult to men of the ****sexual persuasion, but I never imagined that it's barred in the UK. Is this because I'm closer to 80 than 70, and am I in danger of joining the marvellous Ms. Rowling and getting pilloried by the wokerati? I do hope not. Happy Days!

Lucy Frazer, the umpty-third Culture Secretary in charge of the review of the 2005 Act, has written a very calm and measured article for The Times today. Despite this, my favourite rag leads the front page with an incendiary and totally untrue headline; "Game is up for gambling firm exploiting the weak, vows minister."

Lucy herself, buried on Page 8, writes: "That's why the government is committed to an overhaul of the rules with an approach centred on balance: to protect the most vulnerable, but not get in the way of the majority of people who want to have a flutter. We live in a freedom loving democracy where, for the overwhelming majority of adults, betting is a bit of fun."

Stand by for the tsunami of pre-prepared sob stories, from minority special interest groups, about children being sold into slavery, because Dad's blown his pay-packet down the dogs. All of which is very sad, but addiction surrounds all human activities, including work; we don't close the pubs to everyone who enjoys a pint because of alcohol abuse by a tiny minority. Bats and Imps still sell ***s to those who enjoy a smoke and are willing to take a chance of not developing lung cancer. It's called freedom and being treated like adults.

The idea is being floated that the bookies will have to investigate any punter who loses £1,000 in a day, or £2,000 in 90 days, which seems very sensible, because unless you're earning over £100,000 a year, that's significant cash.

Meanwhile, the fact that ENT and FLTR are both down less than 1.5% today after significant run-ups in the last three months, would indicate that all the brouhaha in recent years will soon be behind us. Praise the Lord and pass the ammunition!

Flutter today has not only blown a hole in the £150 per share barrier, but some lead-footed institution came in at precisely 2.30 pm and bought over 40,000 shares in one trade at £168.32, costing them over £6.5 million and almost setting a new all-time-high. I'm suspicious that the timing was precisely the moment that New York opened for the day.

Then the uncrossing trade at 16.35 saw almost 92,000 shares change hands at £152.10p, followed, two minutes later, by 5 simultaneous trades of c. 10,000 shares each at between £149.82 and 151.72 for a cost of c. £7.5 million.

All this can scarcely be because of the 3 pm announcement of a trading update on 3rd May, surely? Though maybe the market is finally waking up to how undervalued FLTR has been from Nov. '21 until Feb. this year. Happy Days!

Some years ago, Ticino, they suspended paying dividends because they considered their debt level to be too high, compared to their ebitda. If you look back through their half-yearly results, possibly around 2019 or 2020, you'll see they stated a debt/ebitda multiple target at which, once reached, they'd resume dividends. I can't remember what it was - age, don't you know!

Just shows how very wrong I can be. 13 months later, SHB will disappear next week at £4,20, down 50% in a year.

Capco's results say it's been Shaftesbury's portfolio that's still falling in value. I knew I wasn't qualified to be a commercial property surveyor back in 1970. Sorry.

Thank you, Owls. I had no idea you could filter out the, thankfully few, tiresomely repetitive posters on this otherwise marvellous website. Onward and upward!

'Ercule Poiro 'ere Monsieur Taverham - A quick boo at MGM's news feed reveals nothing, A shufti at the LSE's trading records on their website reveals that the usual small punters (Under £5k) began buying in large numbers at 15.22, but no sign of any hefty trades until the price hit £14.75 around 15.26, at which time a whole bunch of trades between £20k and £45k, noted as 'Off-Book' ran the price up to £15.05, then Joe Public continued to trade heavily in small amounts and pushed it to £15.50.

Looks like a very believable rumour ran round the market. Maybe even a true one??

. . . and 40 days later, Rofert, it has gone from 79p to 91p, which is a less than 40% discount to the 30/09/22 NAV, and suggests that the market believes this one is beginning to recover nicely. Wise and Starling are now supposed to be printing money with the rise in interest rates.

I wonder if the 31st December results will really turn the tide?

@Old World Order: For the benefit of those of us who can't get past The Times paywall, could you please enlighten us as to why Noble Tree are refusing to pay £220,000 of rent per month since September? Thanks in advance!

BTW, the directors of Home are going to get their wrists slapped for their 30/11/22 RNS. The phrase "overdue arrears" is grievously deceptive. Arrears are arrears and Home had £660,000 of them, going back 3 months, when they put out the statement. Whether such arrears are legally considered to be overdue, under the terms of their lease, is neither here nor there. Home was owed a meaningful stack of cash and the tenant seems to have made it very plain that they're not going to pay.

"There's naht so queer as folks" is a very old Yorkshire saying. I bought my first shares in 1964 and markets continue to be very funny old things; legalised betting on sports in the USA is proving to be the latest mystery to me.

Here's a country famous for it's speculative, can-do, Wall Street bullishness. Willing to back unproven technologies with billions and get swindled some of the time by the occasional Elizabeth Holmes and Sam Bankman-Fried. Even willing to pay multiples of annual sales to get into IPO's lacking any form of profit forecast, never mind actual profitability.

Yet, when presented with a new business, already well-established in many other countries, its' enormous initial enthusiasm declines in inverse ratio to the development of that business. The closer we get to enormous profits, so the SP's fester or decline. I scratch my head wondering what they cannot see, and also wondering some of the time what it is they can see, which I'm blind to with my enthusiasm and substantial and ever-increasing financial commitment.

Last night FLTR avoided firm numbers except to say that they are confident that the current addressable market of just less than $10 billion of total bets per annum, will rise to $40 billion by 2030. Fan Duel has 42% market share = $16 billion, which at 8%pa average historic profitability = $1.3 billion of annual profits from the USA alone. Representing $7.40 of earnings per share.

Based on a 2030 P/E of just 15, that means current SP values the rest of the world-wide business at zero, denarra, nut points.

At which I chuckle, and continue to sell other underperforming stocks to reinvest here and in ENT, while astonished that the rest of market ignores such a girl-edged opportunity. Just got to live another eight years.

Agreed, CJ. Be in no hurry to sell. I'm always amused when the sore loser of a legal judgement announces (usually) that they're "very disappointed". Today FoxBet has excelled themselves with a nonsense piece of PR puffery claiming to have "won" because it'll be a few months before FLTR can (if they want to) do a US IPO.

If find this referral to the arbitrator interesting because no facts are disclosed. What is factual is that FLTR owns 95% of FanDuel and Fox has merely an option to acquire 18.6%. Ergo, Fox owns nothing of FanDuel, so how can it "participate" in an IPO, when it has no shares to sell to the public in a flotation? This smacks to me of Fox merely playing legal-silly-beggars and slowing things down.

In fact, I see no reason for FLTR to be in any rush at all for an IPO. The original reason for suggesting one was because Wall Street was very excited in 2020/21 about bookie-plc's and DraftKings was trading in NY at some stupid multiple of revenue, with no sign of ever being profitable. It would have been a good time to sell, say, 5%, at a really silly price. Prudence, indeed pessimism, has replaced that extreme optimism and DKNG's price is down by some 80% from $61 to $11.

This pessimism may have turned with MGM's recent announcement that they can see profitable EBITDA, from their Entain JV, in the current quarter and a full year of cash returns in 2023. PI's are worrying much less about the enormous sums being invested in luring punters onto websites, now that they think they can see an end to these costs.

Thus, imo, the earliest that FLTR might want to float FanDuel in NY would be after the annual results for 2022 are announced in Feb/Mar next year, and even then what's the hurry? The SP should be rising gently, not only between now and then, but also throughout 2023 as quarterly results show ever increasing profitability (he hopes!). Why sell a piece of an appreciating asset? Unless you just want to be able to show that an SP closer to £100 than £200 is grossly undervalued?

In writing this rumination, I've had an evil thought. The devil is always in the fine details of these agreements: I'm wondering if the option agreement says something to the effect that FoxBet's option isn't for 18.6% of all the shares bought by FLTR in December 2020, but for 18.6% of what FLTR still holds on the date the option is exercised? Or the wording is sufficiently unclear that you can argue that point. As always the lawyers come out smelling of roses, financially.

Meantime, some investment house recently pegged an anticipated SP target of £200 on FLTR. I believe that's an understatement as another broker reckons it'll have annual EPS of £10 during '23. Surely with those earnings growing, a PE of just 20 is very undemanding? This optimist is hoping for £300 by 2025. Fingers crossed!

CS, your questions are good but unanswerable, except by the board. Will FLTR list 10% of Fan Duel in New York? Who knows? They said they intended to back in 2020, until the row blew up with Skybet over the cost of SB's option to increase their FanDuel holding. These results say that negotiations are continuing, while the arbitration hearing is in progress, and with an arbitration decision announcement expected in October. Is it a coincidence that FLTR plans a Capital Markets Day in November? I couldn't possibly comment, but my nose is twitching a little.

Suspicious minds have much cud to chew over these facts. Perhaps more interesting (to me) is that American investors have been very suspicious of any bookies ability to ever generate real profits in the US - witness the halving of SP's generally in the past 12 months. However, based on today's results virtually every US gambling stock has jumped on the real news that, for FLTR, serious cash profits in the US within 12 months, are clearly in view on the horizon.

The question now is, "Who else will make money?" Fan Duel has 51% of the market. Entain another 24%. That leaves every man and his donkey to fight over the remaining 25% and there sure ain't enough to feed all of them. I believe we can expect a major consolidation over the next 24 months as many of the remaining public betting companies either get taken over for pennies, to acquire their 3% market share, or else go bust.

It reminds me of the historic story of the US car manufacturing industry: At the end of WW1, there were over 2,000 companies there making cars. By the late 1930's there were less than 10 and by the 1950's there were just 3. What took 30 years to play out with cars, will, imho, play out in less than 5 years with the betting plc's. Markets move much faster today.

What about the Gambling Review here in the UK? The government has laboured mightily for several years to produce almost nothing. Yet another postponement has just occurred, while we await a new PM. This old cynic takes the view that the government's revenues from betting are far too large to jeopardise in any remotely meaningful way. So the Review will be an exercise in tossing enough small bones to the well-financed PR campaign planned by the anti-gambling lobby to let the media make a fuss and then quickly move on to the next scandal/ministerial disaster/inflation update/whatever. Will UK plc shares fall, when it comes out? Almost certainly, but not by much and certainly not for long. The profits will remain and will remain valuable.

The thing about common sense is that it's actually quite rare in most people's experience. More reading, much more reading is required on your part, CS. Had you properly researched betting in the US, you would know that each state is in total control of the gambling in its' jurisdiction. New York was firmly against legalised betting until this time last year when the state ran out of cash. At which point it turned 180 degrees and legalised it, with effect from . . . (care to guess, CS?) Yep, w.e.f. January 2022. And who was at the front of the queue on Day 1? Yep, it was Flutter with their application papers.

At the risk of being a bit tough on you, there's a old saying, "It is better to keep your tongue still and be thought foolish by others, than to open your mouth and confirm their opinions." Keep researching, CS. This stock will make you a lot of money over the next five years.

At the MGM 1/4ly Earnings Call two days ago, Robin Farley of UBS asked Bill Hornbuckle, the CEO, whether they're thinking of bidding again, especially now the SP is well down. Here's his reply;

"Robin, we think about it all the time, of course. It'd be foolish to think otherwise. Any you can't buy what's not for sale. We remain keenly focussed on BetMGM. We'd like more of it. We have a great partnership with them. That business is working well because of what we ultimately all provide, our IP, our database, their technology. And so there are other ways to skin a cat, and potentially, we may have to seek those and it is what it is. But, obviously we continue to follow the math, and we understand it intimately. But, for now we have no story here."

Read into those opaque observations, what you will!

Of course there's a presumption of innocence, mt. However, when HMRC charge you with being the owner of £400 million of overseas assets, which you have concealed from their all=prying eyes and on which you have failed to pay taxes, there's a reasonable assumption that HMRC have got Bernie bang to rights and that his only choice is to plead guilty.

Though whether a man who'd "take a bullet for Vladimir Putin" is actually that intelligent these days, is definitely a moot point. Perhaps at 99, he's gone a touch senile?

No, Mike. There's absolutely no way that a company's hedging positions become public. Except perhaps, long after the fact, if a company discloses that it perhaps made a right Horlicks by, say, selling all its uncontracted oil production forward for the rest of 2022 at $120, only to see the price continue to escalate to, say, $170 by year end.

If you think about it, knowing someone's large hedging position in the cocoa, or corn, or anything market, then you could trade against that. That said, some companies do disclose their positions in their half, or full-years results. Usually to give shareholders confidence that management is locking in certain profits, in a volatile market, for the next few months, or longer.

The futures market can be difficult though; 1 month oil is £120. But 6 months out, for delivery next January, was just $100 when I looked a few days ago. IOW the pro's think that the current price is unsustainable, but if you kept an eye on 3 & 6 month oil and see that the discount is narrowing substantially to the forward month, that would tell you that the pro's are changing their minds. Aren't markets fascinating?

There's no such thing as a foolish question, Mike. Keep asking. It's the only way any of us have learnt our way around the markets. Here's a worked example, to answer your question. $ Cash profits of $200 are worth £133 at $1.50 per £ and £100 at $2.00 per £. So the weaker the $, (the more dollars you have to hand over to get £1 in return) the better the profits in sterling terms. The stronger the $, the more pounds you get when the bucks are repatriated to the UK.

You'll find that fluctuating profits, turnover, etc, due to fluctuating exchange rates, can make it difficult to see whether the underlying business is growing or shrinking, so BATS will issue a set of accounts showing the actual numbers, with an adjacent column, labelled 'constant currency' (CC). This adjacent column converts the current results to the same exchange rate used for the previous results. So you can see how trade has changed had there not been any currency movements.

Remember that companies with substantial foreign earnings may also take positions in foreign exchange markets to boost their profits, or to protect them ("hedging"). For example, with crude oil up at $120 just 2 days ago, a producer could have sold his estimated July production forward for delivery in July, rather than taking a chance on where the spot market might be in six weeks.