Member Info for Globex

With Wall still being there as an advisor until May and therefore still on the payroll, I wonder if he still gets another dose of shares too. With him not being a proper director any more they don't have to name him of course, good job as otherwise some folks would be sharpening their pitchforks.

Sort of. In August last year for example he spent more than £800k on shares now worth £360k, so the point is I imagine that will sting. Bigger cost still be will reputational. In recent years to have been chair on one company that went from FSP to administration might be seen as bad luck. For it to happen a second time, as risk here, might be tougher for the old CV to recover from.

Perhaps market waking up to the idea that AI and automation will kill companies like this

Did you notice the share price fell after the deal was announced?

My take is market is the best judge and on that basis it is pretty clear that our depressed share price reflects a massive dose of scepticism over Prax's IOU ever being paid.

Sophisticated investors have had the opportunity to assess this deal, do their own due diligence on Prax's track record, and it is very telling that we are priced this low. If anywhere close to 12.5p was assured this would be the arbitrage opportunity of a lifetime. Hedge funds and special situation funds would be closing the gap. The fact they're not speaks volumes.

Most tellingly of all Hurricane's announcement itself says:
"The minimum payment under the Deferred Consideration Units could be zero."

The mad part is it wasn't long ago they spent millions buying back shares when they were 40p+. They only stopped when it was clear they were on course to run out of cash but by that time balance sheet was utterly weakened.

You're correct guys the sale proposal is an ordinary resolution
p15 here
https://inthestyle-wp-2021.s3.eu-west-2.amazonaws.com/media/2023/03/265414-Ideal-Circular-WEB.pdf

This definitely should be challenged. Major shareholders seem to asleep here but it's striking there are pretty much no institutionals amongst them, Frisby seems be trying to exploit that.

The other mystery with this firm is how far off their numbers were at year end.

On the 6th Sept they said:
"Group is expected to make an operating loss of approximately £29.3 million for the year ending 30 September 2022 and a loss before taxation of approximately £37.1 million.
Net assets at 30 September 2022 is approximately £145.9 million."

Then on 25th Jan, contrast:
"The expected loss before tax for the year ending 30 September 2022 is now approximately £91.0m and the net assets at the balance sheet date approximately £90.0m"

For a small company pretty chunky differences. Sept figures were close to their year end also, 11 out of 12 months done at that point. No wonder the auditors are struggling with their numbers.

They notified market of transaction in late Jan so too late to fall within any published accounts. Transactions like this opaque at the best of the times with legitimate companies when above board, on the other hand auditors would have full visibility...

Very messy. Wonder if the related party transactions relate to the sale of 2,822 plots for the giveaway of £9.5m. Even with claims of those being less desirable that worked out at less than £3.5k per plot and obliterated their land holdings.

Yeah he couldn't sell now even he wanted to. Sure he'll hold through to end as he did with Eve his other recent chair all the way to the end. He'll certainly be hoping this FSP works out better than Eve's, even if he'll frankly need to pull a blinder just to break even.

Can't see a paid subscription working for digital if that's what you mean, these are lower grade titles competing with the Mail/Sun/indy locals. We're not talking the New York Times here. There's a reason the Sun ditched their paid for model. Still plenty of opportunity for revenue growth without paywalls, just look at Future, all from affiliate marketing and dynamic advertising.

Pindar must be sweating bullets, he's at big risk of taking a major bath here. Wonder if he regrets all those buy ins to shore up his position when under pressure from the activist.

Personally I cannot wait to vote no to this deal. The odds may be stacked against us, but what do we have to lose?

In the longshot David and Goliath scenario of us winning there would have to be board resignations. Would relish the drama of a Capricorn Energy style wipeout. The market has now priced in a yes and has shown its contempt for the deferred consideration by giving it almost no premium. Knowing the market doesn't trust Prax's IOU, if there's one thing I've learned it's do not fight the market.

In my opinion the only near term share price upside comes from no. What happens after that, who knows? Let the hydrocarbon gods decide. But it has to be better than this shambles of a deal.

Place your bets gents.

Hurricane's standalone figures place no premium value on the equity. In the event of no sale, those contingency funds set aside for cessation would remain on the balance sheet and the market would value them accordingly.

With no sale we could freely trade our shares and if the market could decide the value of that portion, my bet is it would not be zero as their figures imply. Especially given there has been a correlation between market cap and cash - yes even the restricted portion - over last year.

It doesn't help that have no visibility on full year audited figures yet so are entirely dependent on board's numbers, when they are known to be conservative and have their own incentives. Questions hanging over Stiefel's conduct don't help either.

Whether Stiefel's actions go beyond the unethical to fully qualify as insider trading is not my determination to make, by the way. What will certainly enable questions of malpractice going away is that FCA are normally asleep at the wheel when it comes to wrongdoing with UK equities, just look at Wandisco, Revolution Beauty, Patisserie Valerie, the list goes on. But the they're currently the only route we have to whistleblow, so will leave the judgement to our esteemed enforcers, your honour.

As brokers on the deal Stifel will also have been paid a percentage of the overall sale price, including the deferred consideration element, regardless of those payments being highly contingent and payable over years.

In also buying and selling shares throughout the whole process while having access to material information not afforded to other shareholders, they have been sailing very close to the wind. I hope for their sake that those profits made it worthwhile. With a quadruple role of broker, nomad, advisor and trading shares, they have sucked at Hurricane teat until it's completely dry, so to speak.

It's an interesting punt. It's a bit different from other distressed companies at this stage because the lowball offer on the table means share price can't go to zero.

If the vote is a no, Frisby will have to resign and arguably him being out of the way will in itself be a share price catalyst because he's overseen such value destruction. That's when shareholders will really need to hole their nerve because the board will threaten administration.

That's where it gets interesting because based on the latest financials provided by the company, the sum of parts is significantly greater than the current market cap. With very little debt, in theory even admin means a net gain from current market cap of only £500k. The wildcard is a white night, stranger things have happened.

It's a funny investment whereby the most profitable option would be for them to simply sell everything and shut the doors. By continuing to run the fund, they are effectively eroding value.

That assumes their NAV can be trusted of course. Discount certainly reflects a big dose of scepticism for the value they place on their unlisted stocks. It doesn't help that there's such a long gap between them updating the NAV for those. September 30th last year feels like an ice ago with all that's happened in the markets. One thing's certain, things haven't improved since then.

Yes the comparison is wrong and figures they've presented are for standalone Hurricane have been heavily massaged lower. As well as the 3p black hole, they are claiming that for the whole of 2024 Hurricane standalone would be capable of throwing off only 0.83p per share. Self evidently we get more than that from a single lift.