Member Info for joseywales

The cash is not to fund loss and cash burn. It’s largely reducing debt. The market already priced this at 60p with 795m of net debt. A large chunk of that raise should end up on the market cap after RI. So long as you can buy the RI, I think this sorts itself out in a couple of months. Got to remember the drop to 60 was lead by people who had the inside track on this. They’ll do well buying in the 40s now!!

KG I'm not sure what you are saying. If you sell before ex-rights then you will likely take a 25-30% hit on yesterdays SP. IF you remain and get consolidated, you then have the RI which you can sell on if you don't buy into it. So yes, not taking it on, you will have a haircut but nowhere near 80% of yesterday's SP. If you do nothing, I'm not sure if your rights expire or the broker automatically trades/buys them. I imagine there's an automatic redemption built in but I have never sat and done nothing.

The market cap should amend with the cash injection. I'll be honest and say I have not really looked at that element closely. Of course there's the intangible benefit of the cash and how it's used. I imagine that will be limited since it's largely debt reduction only and less debt does not necessarily mean more business.

I think the comment about the trough bottoming out is also positive.

Cheers Hereshopin. You have a lot of patience in laying all that out!!.

I think the bottom line is the market has overcooked the reaction a little but will effectively bring this to a 'post RI' market cap equivalent of where it sat last night. So in a dumbed down way the 60p has turned to low 40's.

KG, I concur with MoneyMule's math. If you take the 42p SP today, you'd end up with 288p post consolidation and RI.

Take my 66p average before all my messing around this morning ... that would equate to a 357p post RI average.

Really was not expecting this and makes me wonder which other companies will follow suit. I sold everything this morning first thing and have bought all back now. Never nice these rights issues but I still consider it a solid company and still expect significant growth in the SP after the rights issue. I don't think the 1-2 year picture has changed much .... I will just end up with a lot more invested after the RI.

Wigwammer, just like MCG, this is a patience play with 1-2 year outlook. Adding at these levels and bundled in an ISA could become a real earner particularly when divi's come back. Let's face it, they were being incredibly prudent and conservative when they took the divi out of play.

The horse has bolted if you're opening shorts now Karlo. You're playing months behind the people you should be learning from. They'd have kept a long open and opened a short to hedge. If you're just short ... good luck!

I don’t think there will be a raise. I reckon it’s funds reducing … particularly M&G/Jupiter. This will be a very nice earner and my hope is to double or treble my money here in 1 to 2 years.

I'd agree with you in terms of management never really committing to an outlook. Lets see what Thursday brings. Maybe that will coincide with this background seller finally clearing what they needed to. Needs to be a positive to avoid the 50's I feel.

The info I saw is that they have about 12% of MCG. Looks like they may simply 'borrow' against this, hence the registered charges. Just a way to mitigate some personal tax liability I imagine.

I was in CPI when they were down here last time during Covid. I was convinced it was a sure fire success and that the shorters had hold of it. For me it turned about 24p into high 30s and dodged a bullet really. Back then 50's and 60's were being touted quite fairly on a base valuation. I think it went into the mid 40s and then a drop started all the way back to low 20s.

Parking the write-downs, the last information showed cash burn. I think 2021 or 22 was supposed to be the first year back to some cash neutrality .... that's clearly not happened. There are other far more realistic multi-baggers for the long term. At the moment the business is winning contracts ... if they start to lose any it could become quite catastrophic. I am seriously invested in other stocks but this one is simply on my quick trade list. I can see this at 50/60p long term but personally see the downside risk as much higher than other long termers I have. Much better to trade the ups and downs on this one than hold. Of course just my opinion, and for sure wrong as much a right!

I'd also add that anything MArshall Wace shorts tends to be well managed in the price attrition and stays low beyond the patience of most. Needs an 'event' driven circumstance to push on.

JG, the media have to do that to sell tickets. They are fighting for relevance in a space that's simply swamped with all the different feeds you can get.

When it comes to CPI, at an RSI of 25-ish, you'd imagine a small bounce is imminent. I look at the RSI from time to time just for relatively quick trades. Bought some early this morning so taking the punt this will get back into the low 20s in coming couple of months.

It's not only the net debt reduction to 795m but also available liquidity. It looks like they may well be cash generative. If that's actually the case in this somewhat turbulent period, then you'd imagine it would re-rate quite quickly. Like I've said before, non-cash impairments will be treated negatively so I see that as the main risk in the coming results.

Of the ones I'm holding, the long term potential of this and MCG excite me the most. There seems to have been a real arbitary view of companies with debt piles without too much consideration of the business fundamentals supporting that debt.

I got a tranches at 500 and and 513. Sold the ones at 500. However I think it's still oversold on the day and unlikely to be recovered in the auction at end of day. Might be interesting at 16.20.

What they done Polishcap is typical of conservative Swiss money. Almost as you say, helping out. No doubt is will be Hans wildorf foundation members pulling strings as opposed to Rolex executive….and as I’ve said already, the status quo maintained. The last thing they want would be structural channel change…that would be madness.

Well 2, 5 and 7 certainly.

Point 1 is perception rather than fact. It's manageable debt but that really is a moving target with unstable forecasting model in terms of where rates will go and for how long. A lot of funds simply adjust 'investable' criteria for their portfolios so fund reductions in this type ticker are arbitary based on the data fed in. IT's basic risk reduction and managing their own funds outflow which should begin to change.

I'd also add that in the same way, non-cash impairments don't help as these systems will simply treat loss as a loss and cash generation is not looked at currently.

This is just the behaviour of ‘old’ Swiss money. Rolex have done this to maintain the status quo, nothing more. I’ve just bought in for a quick win.

I reduced what I hold at the beginning of August just because of the continuing delay in results. I imagine one or two of the major holders are selling this downwards as opposed to activity from the shorts. I'll hold what little I now have on the off chance the delay turns out to be a solution to take the company private through structured MBO.

Got to say, when I bought these sub 95, I thought they'd bounce straight back up. Just added some more as it makes no sense. Not like they are drowning in debt and the outflows will abate in the relatively near future. Last time I had these I sold in the mid 120's and it went to something like 150. No reason it can't do the same again and I'll hold this time!

Well at 310m market cap it's trading at about 2x what you'd imagine the EBITDA would be this year! That said, it's not alone in that range. Once there are whispers about rates peaking and inflation controlled, funds will start ploughing the money back in. Problem is, what happens across the pond is such a significant factor. When a UPS driver gets $170K p.a wage ... you wonder if their woes are not quite over inflation and rate wise!