Member Info for GSmiley

@phoenix - Sunday doodling waiting for lunch... The short position may be a bit higher - shorttracker shows it at 5.78%. Whichever number is correct, both are very high. PAYS is the 12th most shorted stock on the London exchanges at present. I am no expert but imo this figure represents the proportion of PAYS equity that has been lent for a fee by LTH's to investors shorting the stock. If those loans were recalled, and the stock could not be borrowed elsewhere, the shorts would be forced to close on the open market. :-) Unfortunately, the world does not work like that and short positions can persist for a very long time after pi logic would suggest they should have been closed. Which is why the majority of those who did the shorting have NOT closed their positions. The peak short position on 2nd December was 7.14%. So roughly 1/3 have closed, 2/3rds remain. As to the sp rising or not - obviously only time will tell. However, without putting words into his mouth, I think Technie is more optimistic than he was (that is chart based). I am optimistic because in terms of fundamentals I think PAYS is undervalued. I add to that my belief that the trading update will be designed to discourage further shorting and my conviction that the buyback (which I love and you don't) is a very good thing. Here is why I like it. It was announced on 20th December. The sp jumped on the announcement and gapped up at 8am, So, from the close on 19th December to the close on 6th Jan the sp has risen about 35p. The buyback in that time has purchased 1.29m shares. I can't be bothered to work out the average price, so I will just take the average price paid on 6th Jan (which must be higher than the true average and so makes this calculation look worse than it should). 1.29m shares x £3.71 = £4.792m (cost to the scheme so far) £4.792m / 489m shares = just under 1p per share. That is the cost to you as a shareholder to date and that cost has reaped a 35x reward. Stunning investing. If it triggers a short to close - which will drive the sp upwards - then there is a multiplier effect. It is probably true that the buyback is not the only reason for the rise in the sp, but for anyone who has watched a company in the grip of short sellers where the company has no defence (remember QPP anyone) there is an awful cycle of pump and dump, repeated again and again and the sp simply gets stuck. The buyback imo stopped that cycle and allowed natural demand for PAYS to surface. No buyback, no resurgence in sp. I was lucky and bet the farm in the 250's and 260's so my average is just sub 300 - from my perspective, that 35p increase is anything but "sad". We invest to make money on shares. As long as that is achieved legally I am all in favour of company management using any trick in the book to maximise shareholder value. That is what they are doing here and it is what we pay them for. Fingers crossed for 12th. GLA longs GS

@Technie - Thank you for the link and for an interesting read. Point taken and I get / agree with some of it. Where I struggle (and we will probably agree to disagree) is when there is a consistent, predictable influence such as the buyback that is going on right now. If it goes full term - which I doubt it will need to by the way - it will have removed from circulation very roughly as many shares as are shorted right now. That has to have a positive impact on the sp. One can see it happening right now. Which is one of several reasons I think the sp will rise a good bit over the coming weeks/months. And here I am talking about price.... :-) GL GS

Thanks for your posts. Useful. GS

@Filmster What do I know? I have no idea, and looked at dispassionately, it would seem that 400p in the next 4-5 trading days is a big ask. At the same time PAYS is easily capable of moving 15-20p a day. In both directions. We have all seen that happen more than once before. imho - it won't get there without help. That help, in the first instance, is likely to be the share buyback programme. The sp has recovered by about 20p since the buyback was announced (9 trading days ago). So, on a linear basis we might see 380p by 12th Jan. But 380p looks like a resistance/support level. If we go through that, the sp can easily roar. Our brokers are clearly (imo) using the buyback to prevent excessive downward movement while holding the door open for shorts to close their positions. We have seen them buying at 383.x p so the price they are prepared to pay if needs be is well above the sp today. That should be (and is meant to be) depressing for the shorts. If one cracks and closes then 400p suddenly becomes very possible as the sp will presumably bounce as they turn buyer. If that happens and in addition the word on the street is that the update will be good then 400p should be no problem. Having said which, I hold - for me - a lot of shares here now, I am a firm believer in a fair value probably north of 500p and I am equally confident that PAYS is vulnerable to a bid at an sp below about 440p. Because of heavy buying in the 250/260 range my average is well below today's sp so I am happy to sit and wait it out. I don't know when the sp will go through 400, but I am sure it will, and then some. GS

I think patience is the name of the game here. Pros: 1. It is a market segment that is growing rapidly 2. It seems to be executing its plan well 3. The dividend yield is very good (6%+ this year I think) 4. It is throwing off cash. 5. At some stage someone will start to draw comparisons with PAYS. Cons: 1. It is an Israeli company (look at XLM for a comparison) 2. One of its prime movers has a criminal record - I forget the details but a long time ago. 3. The last trading statement was a "steady as she goes" sort of thing. Not as exciting as people wanted so the sp suffered. If all of the above is correct, the sp will recover OR there will be a strategic investment from outside, OR it will get bought. In the meantime enjoy the tax free yield in your ISA or SIPP and wait for the gain to come. GLA GS

@Technie - one day, when we all have time to spare, I would love a clear explanation of why, when the sp of a share has been damaged by false rumour (as PAYS has I think), the chart immediately after that should be as valid as one where only "natural" market movements apply. A little bit of my brain says that this just can't be right. Just a fun question, as a much bigger bit of my brain says that a buyback is an extremely effective riposte to the shorts and that equally means historic trends are less relevant. At the same time, I have to concede that you have got this right almost all the time, so I am happy about the weekly chart. :-) Best GS

Early days, but looks like someone is buying...

A way out would be my guess. The buybacks yesterday were as high as 383.5p. So letting the sp drift down to allow someone to close (which will itself be good for the sp as someone else is doing the work and the free float reduces) might be a sensible thing to do. I do not think this will fly to an ATH without a few blips along the way, but I am more confident of the underlying trend than Technie. This share should be north of 500p compared with its peers. So the buy back imo is not a waste of money, assets are being bought at a discount of better than 25% at present. That will be reflected in eps and in turn in share valuation (very sexy if there is an uptick in p/e). So I have been buying more sub 365. I am guessing the buyback will start some time soon... GLA GS

Absolutely not recovered yet. There is at least 100p to go and possibly 150p+ over the next 30-90 days. There is no guarantee PAYS will spend all £100m on share buybacks, but the process is only in place because the bod thinks the sp is so low that they cannot get a better eps improvement in any other way. They have been good at improving eps historically, so I am inclined to trust their judgement here. The only reasons they will stop the spend are if the sp recovers by itself (my guess is to about 450p) or if there is a tasty m&a opportunity which will boost the sp all on its own. All imho of course. Happy New Year everyone GS

@nen Quite right - my mistake. Serves me right for doing it from memory. GS

Just letting you know you are not alone here. But there won't be much chat on this bb as XLM looks like it will be a boring share. I have always agreed with you that it is undervalued, but I think it will stay that way until its ownership changes significantly. What is now irresistible for me is the yield which I reckon to be about 6%. The cash pile will either be used to buy (hopefully) earnings enhancing businesses - which XLM has done well so far, or in the absence of any opportunities it will be returned to us / used for share buybacks which amounts to pretty much the same thing. But it is not really a trader's share and so won't attract much attention here. GS

I doubt anyone "knows". However PAYS has bought and cancelled 490,000 shares as at cob on 23rd December - and we will probably see an RNS tonight or tomorrow to the effect that they bought more today. Essentially PAYS is doing two related things. First these buybacks are preventing the shorts pushing the sp down and so are forcing them to buy in the market at current prices (if they want to close their positions). Second the buyback scheme gives existing long shareholders much more confidence that the sp will carry on recovering. That reduces supply for the shorts and we may just be seeing the beginning of a squeeze. The last time I saw one happen at first hand, the sp gapped up every morning for about 10 days. I have no idea if the same will happen here, but my last and biggest buy was as soon as I could after the buyback programme was announced. I guess others did the same. I am now comfortably in the money and intend to sit tight until we see new highs. So my eyes are firmly fixed on the last high - imho you can bet a lot that the trading update on 12th will be as strong and upbeat as PAYS management can make it. Barring disasters, the buyback plus market support should walk the sp back into the mid 400's before that update. If the report then is as good as I hope then I would expect 467p to be broken on 12/13/16 Jan. I suspect Technie may disagree. He is usually pretty accurate and I hesitate to argue with his predictions, but I think charts are less useful when there have been severe price spikes/dips. Especially when they are fought off as ferociously as this one has been. We will see GLA GS

@BB - Completely agree. Far too much riding here to ignore it. I am a buyer in the 340's and am keeping a bit on the side just in case the shorts have another go although since PAYS can take over 30m shares out of circulation at any price below 330 they would have to be very brave indeed. Whatever.... have a good xmas. GS

Maybe last chance to buy at these levels? PAYS is buying back at an average of 359 per last RNS, so anything that starts 34x is simply a bargain (imho of course). GS

@Wolf Another good day for the good guys.... but just for the sake of debate: 1. The announcement of a buyback scheme ought to put an end to the shorting. PAYS certainly has the firepower to squeeze the kind of outfits that have been looking for a fall in the sp. Just their closing their shorts to avoid that may well take the sp back up to around the 400p mark. 2. 100 million is a good number to use to bring home to the less enlightened that PAYS generates a lot of cash. The point was well made by them in the context of the SKRILL acquisition. Good cash flow encourages valuation.... 3. I still can't see a bid while there are significant short positions out there. Assume a bid of say 525p (just for the sake of argument). I think the first thing that happens to the sp is that it goes to 525p +/- 5% while the market waits to see if it is likely to succeed. The second thing that happens is that shorters are squeezed and close. Which pushes the sp north of the bidder's offered price. Which means the bid fails or the bidder has to increase their offer before PAYS has even tried to rebut. Which means they may well have to increase a second time to win. All imho - which is based on my understanding of the t/o code which is that you cannot buy shares in the open market at a price above your bid. This is just for fun while I try not to think what my spread bets taken out in the 250-320 range might be worth at 525.... So no real disagreement here - I think the sp has an outstanding chance of hitting 500 if not before the update then shortly after. It always spikes with the announcement, falls back a bit and then rises higher than the spike a few days later. GS

Well - I will certainly be overweight after Xmas. A very happy christmas to all and (as a natural long) a happy, healthy and VASTLY profitable new year to you all. GS

When I compare this with a couple of other boards here that I look at occasionally I am struck by how good the posting is. This will doubtless lower the tone. 1. Correct me if I am wrong, but I think a bid for PAYS would trigger a short squeeze... which would push the price above the purchaser's bid... which would defeat the object. Didn't something like this happen with VW and Porsche?Different outcome, but Porsche already had over 30% and borrowed to 70+ percent. There is no one out there in that position and UK takeover rules would prevent such a huge position being built before a bid. But I would love to see it happen. VW's shares went up several hundred percent. 2. None of my business, but @Frisby, in my long and bitter experience, having all your eggs in one basket is a high risk strategy. No matter what the company is. No need to tell me to mind my own biz - I won't mention it again. GLA GS

A word of warning about shorttracker (or you can get the data direct at https://www.fca.org.uk/publication/data/short-positions-daily-update.xls) - just search for Short positions daily update if the link is removed. The warning is garbage in garbage out. There is (I think and happy to be corrected) and max fine of £2,500 per day for late or non-declaration of these positions. Which is chicken feed for a professional shorter who does not care about reputation... GS

@Wolf - no I just boast a lot! This is the only share (apart from MRO) that I have mainly got right over a period of time. If I had half an idea as to why, I would be the second coming of Warren Buffett. I am clearly not, in fact I think Technie is more accurate here than anyone (although BB has done pretty well). But Technie called this fall which I was just hoping. And I am still under water on some of my buys in the 360/370's although very happy that will not last for long. So thank you, but please don't listen to a word I say - it is usually written just to help me think things through. Incorrectly more often than not. And I am with you that a bid for WP would be desirable, but I cannot see why it would have happened by now if it was going to happen at all. GS :-))

@BB you are as bad as Wolf :-) I really doubt it, simply because if anyone was eyeing up a bid there is probably no better place to start that buying into short selling to build a stake quickly before announcing your bid. I have no idea what t/o rules are these days, but it is no offence to hold up to 29.9% I think. A bidder would never have got that many, but if their bid was fought off, they would still make a tidy profit on stock bought in the 250-350p range. So I doubt a bid, but I would not be surprised if Bain had averaged dow. The next few days will tell, but whatever the outcome I suspect we are both sitting on a decent couple of days work... I firmly intend to sit tight on what I now hold and am betting until the sp gets bumps up around the 460 mark. Which on past performance it probably will. Then, as usual, (and as I think you do), I will keep my SIPP holding as insurance against a takeover and sell the rest hoping to repeat.... GL GS