Member Info for Hosai

Not sure if that's directly sold from Walmart Andrew (though could be), some of them are through the third party seller service walmart does rather than being in walmart stores etc.

That's based on warpaints net assets at 31st Dec 2022, obv the latest net assets we have for Rev B is 28 Feb 2022.

Warpaint is valued at 5.9 times its net assets.

Ubik they would have to wait over a year to buy it out lower than 32.6p. That's a long time of hoping the sp doesn't go up/macro doesn't improve.

In the meantime I don't think they can afford to go over 30% due to then having to make a mandatory funded offer of at-least 32.6p.

Rev B gets more of its sales from USA than anywhere else and are in Target/Walgreens and now Walmart. Same as ELF though ELF more established in those places obv, so ELF will be aware of Rev B.

I could see ELF beauty as a suitor...they are arguably fairly overvalued at the moment at £4.82 billion currently.

ELF could dilute themselves by 6-8 percent to raise money and if they bought Rev B would increase their predicted revenue this year by around 36% and their EBITDA around 12 - 13% and that's before all synergies etc.

Well the maximum they've paid is 32.6p which was last weds so that would be the lowest they could us for a takeover offer for the next 12 months.

There hasn't been much mentioned about the fca rns in the Sat/Sunday papers. Times didn't mention it at all.

Fair enough Redhammy and good post.

Worth pointing that while Bob sold some, Boo also bought more shares. As obv did William Currie investments who by Weds have built a position up to 3.14%.

I think while obv an FCA investigation isn't good news, it's mitigated to a degree by the fact that Rev B already had a 4 month independent investigation looking over everything.

It's also not clear whether if there are fines they may instead be targetted at individuals. Perhaps all of this was the part of the reason Rev B were taking legal action against Minto. However I also think if this action had been foreseen it would have been mentioned in the accounts as a potential liability so to speak but wasn't.

Even if there was a fine, the FCA would take into account the effect of such a fine on the company in a worst case scenario. I don't believe it would be a bad fine though as I said in a previous post the worst part was the £9.6 million revenue pulled forward which was around 5% of the genuine revenues. FCA consider the materiality when judging these things.

"Where an individual or firm claims that payment of the penalty proposed by the FCA will cause them serious financial hardship, the FCA will consider whether to reduce the proposed penalty only if:

(a)

the individual or firm provides verifiable evidence that payment of the penalty will cause them serious financial hardship; and

(b)

the individual or firm provides full, frank and timely disclosure of the verifiable evidence, and cooperates fully in answering any questions asked by the FCA about their financial position.

(3)

The onus is on the individual or firm to satisfy the FCA that payment of the penalty will cause them serious financial hardship."

(1)

The FCA will consider reducing the amount of a penalty if a firm will suffer serious financial hardship as a result of having to pay the entire penalty. In deciding whether it is appropriate to reduce the penalty, the FCA will take into consideration the firm’s financial circumstances, including whether the penalty would render the firm insolvent or threaten the firm’s solvency. The FCA will also take into account its statutory objectives, for example in situations where consumers would be harmed or market confidence would suffer, the FCA may consider it appropriate to reduce a penalty in order to allow a firm to continue in business and/or pay redress.

https://www.handbook.fca.org.uk/handbook/DEPP/6/5D.html

Redhammy you did say previously you had now sold, so arguably you might have a similar bias you accuse PP of but to the negative now.

Oxygen, you mentioned petrofac who fell 30% after an announcement of investigation, but that wasn't the fca it was the serious fraud office. Also sounded slightly more severe for them I'd say - "The SFO said on 12 May that it was investigating the company, its employees and agents for suspected bribery, corruption and money laundering".

In the end they were fined £77 million, obv when deciding the amount of fine the companies revenue/profit is factored in. Petrofac make/made billions in revenue and hundreds of millions in profit.

https://www.theguardian.com/business/2017/may/25/petrofac-suspends-coo-sfo-investigation-oil-services

Worth noting too unlike petrofac Rev B have had their moment of realizing something was wrong which made it fall from 50/60p and also already had an independent investigation that took 4 months.

Here is details on how the FCA determines fine levels (if they decided to do one). Rev B are sueing Minto, maybe they can get him to pay if there was a fine?

https://www.handbook.fca.org.uk/handbook/DEPP/6/5A.pdf

It's clear from the rns it's focussed on the Minto/Allsworth period - IPO in July 2021 - Sept 2022.

However the actual regulation it refers to sounds more to do with share trading i.e things like insider dealing, than the issues we already know about such as the £9 million revenue etc.

I still think the actual issues found in investigation weren't as bad as initially feared. There were illegal loans (which were relatively small) etc but prob the most significant was the £9.6 million false revenue, but even that was £9.6 million out of £184.56 million genuine audited revenues. So 5.2% which had been illicit pulled forward revenue. Obv it was wrong, but it's not exactly wirecard levels of materiality.

Having said that, still not 100% if it wasn't more to do with share dealing? This is the regulation -

https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32014R0596

Large shareholders always seem to find these things out. Plus in this case Rev B and boohoo have been extra intertwined in dialogue the last few weeks to the point of boo putting forward 4 of the candidates for the board.

Unless Bob kept the news to an very tight circle you would imagine boo would have had some kind of knowledge when they bought off him?

It would seem hard to imagine Bob knowing about this a few days back (and selling because of it) but boo who bought these shares of him and Liz to pay their tax for £1.25 million odd not knowing or having any inkling about it.

Reading up on the "Market Abuse Regulation (EU) 596/2014" as cited in the rns it all seems to relate to trading, rather than the specific issues from the investigation for example?

"Market abuse is a concept that encompasses unlawful behaviour in the financial markets and, for the purposes of

this Regulation, it should be understood to consist of insider dealing, unlawful disclosure of inside information and

market manipulation. Such behaviour prevents full and proper market transparency, which is a prerequisite for

trading for all economic actors in integrated financial markets."

https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32014R0596

The timing does seem...interesting? Literally three days after the agreement with boo.

It does seem crazy timing, the investigation results came out in Jan. Its not like there hasn't been time for fca to get involved.

If its to do with share dealing i genuinely have wondered about boos buys in aug. They seemed so well timed at the bottom to buy in confidently large just after it fell so steeply. Could Minto have tipped them off the rns was coming etc but the issues weren't massive?

Rev B already had a 4 month investigation delving into everything and all those findings used to guide the audit. Doubt the FCA know much more or even are looking into that.

Obv it's to do with the founders considering the dates up to when they still had management control. The chair stayed on longer than Sept but he wasn't managing the company in any way beyond then was just helping with the investigation.

Rev B themselves stated they were considering legal action against Minto.

Someone said" could be large fines", surely if true any fine would be for the directors themselves, if they had to sell their shares to pay some it arguably wouldn't be a bad thing.