Member Info for GSmiley

Works for me
GLA
GS

Just bought another 51k @ 34p ar 10:56am. INteresting to see how it shows on the share trades page (when it catches up)
GLA
GS

This is when LTH's wait...

XLM does not issue many RNS' and probably won't say if or when sites for review were resubmitted to Google. The first we are likely to hear is that one or more have, or have not, had their penalty removed. It is entirely possible that announcement won't happen until early 2021

A thumping uplift in sp because EBITDA visibility gets a whole lot better and bigger if Google plays nice. Also because the management team is seen to be delivering. My guess is a quick jump to 60p, a profit take, and then a steadier recovery towards £1 (which is my target).

A really painful few days/weeks for the sp if the penalties remain. Don't be surprised at 15-20p - the MM's will shake for all they are worth. My view of the underlying value - public knowledge here - is that it is higher than the sp is today so if there is a price slump I will be buying more.

GLA
GS

Added more just now - guaranteed to make the sp fall further...
GLA
GS

I have been through the process. It is not pleasant, but it IS a process. You can see a whole industry around it - just google "removing a google penalty". They all say the same thing - remove the bad links, improve the quality of the site and resubmit. It is just one may need to resubmit more than once before Google is happy the "bad links" have been sufficiently reduced. XLM has tried once, hopefully they will get it right this time.

However, right now, off an average of under 20p I am thrilled. But not to the point of taking profits - I still think this has a long way to go.

GLA
GS

Not so much a hope as an expectation. Google penalises sites against a set of "quality rules" parameters. It removes the penalty when a site is no longer in breach of those rules. A sensible business with considerable resources can be expected to do what is necessary to ensure compliance and reinstatement. So for me, this is a case of when not if.

GLA
GS

@jl - TY
You are right - maybe because I have never got a trade right in my life, but I like undervalued shares. And this is undervalued if you accept that the management team need to deliver on their promises.

It sounds as if the cost savings are locked and loaded and we should get confirmation fo that in February.

Which means that while the penalty is not this management team's fault, removing it should be occupying their every waking moment. My business suffered a manual penalty and (eventually) got it removed. It is not straightforward and Google can be cryptic when they refuse to reinstate a site. Which they did here in July. So, for me, this is where the risk/upside is. A resubmission will happen in the next 8-9 weeks. Google will deliberate, but in my experience not for more than a couple of weeks at the outside, so we should hear by mid-Jan 21.

Fingers crossed.
GLA
GS

I still think this is a screaming buy. Cash reserves pretty much maintained (down $2.6m in a year with a Google penalty and COVID and a cost reduction program (redundancies cost money). Still making money albeit not much. Market cap roughly 2x cash in the bank.

Expectations clearly set out in the last RNS are for:
A general improvement in trading
Removal of the Google penalty (from memory) I think XLM said this was costing them $1m p.m.
$5m p.a. cost reductions to begin to show in the second half of this year

Each of the above, taken separately, on even an ultra-low multiple should be worth more than the present market cap minus cash.

GLA
GS

Ha ha. Shows how much I know. :-(
Still think the sp will be going up though and happy to buy more this am in the 24's.

GLA
GS

I am very long here, in profit and have no intention of leaving any time soon since I am looking for £1 and am happy to wait a while for that to arrive. Interest declared.

Without casting aspersions, but as a student of XLM over a number of years, it has always seemed something of a leaky ship (IMHO) when it comes to news affecting the SP. Just an opinion.

So, with the SP rising against a backdrop of UK share prices generally falling today, I wonder if we may hear some positive news soon...

Given the insanity of a cash-generative business with recurring revenues, money in the bank and what is beginning to look like a decent management team all on a p/e of less than 5 - then a rerate any time soon just might be worth waiting for.

GLA
GS

You may well have made a good decision. However, watching my boys dealing comfortably with Man City and cruising into the FA Cup final I noticed three things.

1. There were virtually no people at Wembley (players, officials, some stadium staff and presumably camera crews).
2. There was no observable social distancing between players. Lots of arsenal hugging at the end for instance. This may be because they are living and training in a bubble.
3. As far as I can make out (v happy s/h in GAN Ltd) sports betting seems to have done really well online since the resumption.

Put all of the above together and I doubt sport will be stopped if there is a spike. Politically people have to be given something to look forward to and total lockdown kills more people than Covid. So I am stating in for now. If the sp rises sharply before October (Google penalty removal, trading update etc) then I will probably take some profit. But that will only be short term - I am quite happy to wait and I think this is a share that is grotesquely undervalued.

GLA
GS

...ought to be sauce for the goose (XLM in this case).

I have been in and out (and in) here and now hold - for me - a large stake - about 150k shares.

Background - The rot set in with the trading update in June 2018 when it transpired that XLM had effectively raised money at a premium price while at the same time trading conditions in Europe especially were worsening. Ory was regarded as being responsible for that (he probably was). Add to that an idiotic buyback/tender which was a license to print money if you took it up and it looks pretty sure that a group if ii's insisted on his departure.

That he is still buying says that he is either a fool - which he is not - or he thinks XLM is a good future bet. I think it is the latter.

The dividend looks pretty solid - I cannot see it going up this year but there is terrific underlying cashflow so it is well supported and what is not to like about a yield of about 9%?

What is interesting to me is that while GAN's sp is flying (happy holder), XLM is not. While not the same, their businesses are in the same sector and XLM has always been good at bringing gamblers to the tables. That is why there was such a severe reaction to its warning in 2018 - namely that regulation was changing and life would get harder. Their number one problem market then was Sweden (pop c 10m). Orys' swansong presentation (video on the XLM site) makes the point twice that in the longer term, XLM sees more regulation in Europe as being a good thing. Be that as it may, XLM has a platform and licence registrations in the US. That is where a succession of states are liberalising online gambling. The newest looks as if it is going to be Michigan (pop 9m+). That is in addition to New Jersey (pop 9m), Pensylvania (pop 12m+), Nevada (pop 3m) and Delaware (pop more shelf companies than people). XLM will be feeding at least some of this growing population of online gamblers into the online operators and none of the upside there seems to be in the SP.

It may take a while for the market to assess the new CEO and no doubt he is doing the rounds of the ii's at present, but barring disasters this is a share that looks overdue for a rerating. With the yield I can afford to be patient and reinvest dividends while I wait but I will be really surprised if the sp is not well north of £1 12 months from here.

GLA
GS

Thankfully I am not very invested here (yet). Looking forward, the shares will be suspended - quite possibly until the delayed results are published. So no one is buying or selling any time soon. When they re-open, the dividend will be cut and the numbers will be worse than expected. Having said which a quick look at the new CEO's cv suggests he knows what he is doing and ESL was already valued less highly than its peers. So it just may be that quite a lot of the sh*t that is hitting the fan now is already in the price.

I am not going to do anything hasty but id the sp is badly down when the suspension ends (and it probably will be) I will be sorely tempted to buy more. I still think this is a decent company with good assets, sitting in the middle of a sector that is growing fast.

GLA (we may need it)
GS

Looking very seriously down when the suspension ends. Extremely boring.
GS

Apologies. Typo. 67-68p should read 71-72p

The price is drifting for a range of reasons:

1. It was propped up by the tender offer and the buyback scheme. That is now finished. I found it staggering (but delightful) that more people did not take the tender up. The probability was that the sp would fall as soon as the offer closed. As it turned out, those who sold at 80p and buy back at 67-68 on the day.
2. Anyone who thinks that OW walked is kidding themselves. There was a fund-raise at a full price immediately before a profit warning. That raise has subsequently effectively been used to buy shares back. Pretty obviously no one raises money by way of a share issue to repurchase shares... He has now been made to fall on his sword and, unless an ii has offered to ake up his shares there is an overhand which will hold the sp back until it is cleared.
3. Anti-semitism rules - there have been a number of Israeli founded/managed companies that have "disappointed" so - unsurprisingly - the market is suspicious.
4. The business is refocussing. Always a risk.
5. There is a new CEO coming in - he looks good. Just remember Warren Buffet: "When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact ..."

Having said which I am not bearish. I tendered all my shares and subject to my maths sold approximately 30% at 80p. I rebought the cash equivalent at below 70p. I think the refocussing is sensible and the new CEO looks more than capable of delivering. XLM's economics look OK - it generates cash and the dividend (which I still think maybe cut a bit - see previous posts) is nevertheless very good. Longer-term, as confidence returns, the sp will climb which is why my holding is now just over 85,000 shares and will continue to rise as and when.

GLA
GS

Anyone. I look at them but am a rank amateur. Right now it looks to me as if ALT is trying to break a ceiling around the 112-113p mark. Any thoughts/comments?

Thanks
GS

@shizsu - There is no answer to your questions although Diagon Alley probably sells crystal balls.

There was a statement on 25th June (less than a month ago) which said: "1pm plc, the AIM-listed specialist finance provider to the SME sector is pleased to announce the following trading update ahead of the publication of its final audited results for the financial year ended 31 May 2019, which are scheduled to be announced on 24th September 2019. The unaudited trading results for the year demonstrate further growth with revenue up 6% and profit before tax, exceptional items and share-based payments ("PBTE") up 4% compared with the prior year...." etc etc

There will be a further update in September with the full-year results.

So you either take the view that this is severely undervalued and you should be topping up/averaging down or that it is a potential basket case with inadequate bad debt provisions that will implode as we enter a recession and defaults get worse.

As a parallel, take a look at the chat on XLM around the end of May/first couple of weeks of June. One poster, in particular, was vexed about the sp drop, market manipulation and goodness knows what else. Since then the sp has risen by over 50% and may well do more.

If it is any consolation I have just got more OPM but I only bought in after the sp fell at the beginning of this month. Who knows, but I think it is a carefully run business that is quite likely to get a bid from a bank that can significantly lower the cost of capital on its loans.

GLA
GS

@james/ed
The tender price is fixed at 80p. See the last RNS:
"the Tender Price will be fixed at 80 pence per Share which represents a premium of approximately 10 per cent. to the mid-market price of a Share at the close of business on 15 July 2019, the latest practicable day before the printing of the Circular"

@LZ - there are a couple of things in your post which you may want to review.

1. There is no reason I can see why there should be a cap on the sp of 80p. The sp will be determined by the market. If the proposition that "the shares are undervalued therefore buyback" holds water then it is entirely possible that the tender will "fail" as the sp, which is in a rising channel simply carries on rising.
2. As an LTH, I would regard a steady as she goes update in September as good news as it supports a good divi yield etc etc
3. The current rise began in the first week of June and the sp had risen by over 50% by the close on the day before the RNS announcing the tender.
4. I have no firm idea what the "natural price" of XML is although I hope/think that it is should be more like 200p which is a lot higher than today. Assuming I am even halfway right then I can see no reason to stop it going past 80p in the next month.
5. Of course, there may be a retracement because of the size of the rise to date but I am no trader and (from the above) hold XLM for the long term.

So if I put the above together, I think the risk in your strategy is that the assumption in your opening sentence may prove incorrect. If so, you will be selling into a rising market and may not see the 70's again. Not relevant for me as I am holding and adding on dips and my average is way below the sp at present. Just sayin'.
GLA
GS