RE: Rescue rights issue?6 Mar 2024 09:26
Abacus burford can easily accept many more litigation cases than they can currently fund, they accept only around 7% of what they are offered, that leaves around 97% just sitting around waiting on another litigation funder getting offered them, burford get the pick of the very best winnable cases ,that opportunity gives them the strongest chance to win 90% chance, that's nearly a licence to print money here, every year as we've seen Burford wins hundreds of millions of dollars worth of cases approximately $600 million plus or around $2 billion over 3 years as they themselves have forecast and looking at their average past return rates, when Burford raises more money in any bond offerings they are essentially saying to its shareholders that they are pushing ahead with staying in front of their litigation funder competitors and raising th new money to achieve that aim, any new money will always be held to fund the massive amount of new cases that are just sitting there waiting for funding, burford can't be caught without substantial amounts of financing money, they could get a unbelievable offer to fund a guaranteed pay out case/ diesel gate tho of case, easy money, there's loads of these types of case's that need huge amounts of money, thus the need for Burford to hold a war chest of money to fund these massive money making cases, thus the continuous need to raise more and more money, it's the same for the banks, they go into the capital markets to raise money for lending to commercial and private customers, you wouldn't say on a normal basis a bank is in trouble if it borrowed from another bank or institution, it happens on a daily basis, Burford will get to a point one day when it doesn't need to borrow money , Burford is today as big as it is because it borrowed money to fund its case's to this point, if it keeps doing what it does then naturally at some point it's not going to need outside funding, it's essentially a money making machine that can return a IRR of around 20% to 30% per year on our money, our top management Bogart etc have hundreds of millions$$$$ worth of our shares , they don't want to see their personal holding diluted with a share fund raise, they want to raise money/ cash at 9+% interest rate so they can keep 10% or 20% of any gain in our profits made from our cases, that's smart, that's why they are each worth hundreds of millions of dollars ,
Burford is a solid great company worth holding very tightly for a very long time, and at some point Burford will have to start
paying its yearly surplus profits out in substantial cash dividends,
GLA.
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