Member Info for Lending

Yes but….how did he het those good exit prices? The courts say fraud and ongoing alleged fraud and this aspect has not helped DT. Pity because his technological nous is exceptional.

“A significant shareholder”. What was said Is something the manager of the Buffetology Fund ( Stamford Deland) might have said. He is UK centric and likes holding onto his gems “hopefully forever” - recently saying that the market simply does not know how to value Dark properly. He uses DCFA. However most iis and PIs will take the money and run even at a price that may undervalue the company long-term. Remember Cadbury?

Or consensus against is growing. Extract from the Times report.

“Opposition is mounting to a potential sale of Darktrace, with shareholders and MPs speaking out over worries that it undervalues the Cambridge-based cybersecurity business and could have an impact on Britain’s wider technology ecosystem.
………..
However, a significant shareholder in Darktrace, who declined to be named, said yesterday that they would be “disappointed” if the transaction went ahead as the company was undervalued relative to its peers, even after the share price had risen once the takeover talks had been made public. They said that the company had set out huge ambitions for the next decade and by selling early in that journey it would not maximise its returns.

The potential sale of Darktrace has reignited concerns over the UK losing star businesses to foreign ownership. Darren Jones, chairman of the business select committee, said it was a case of “another great British tech success story once again at risk of outgrowing Britain. This pattern of fundraising outside of the UK is not new. If ministers want to make the most of the UK tech economy, they need to fix this long-running problem.””

I don’t think I understand what you are saying Petrobull.

If the market cap is 10x trailing earnings ( E= net profit implying a PEratio of 10) But if the earnings are negative in FY22 - a distinct possibility- . and if TB pays as per typical on 10x trailing earnings then surely they will need to be paid to takeover DT.

I am somewhat confused as even if the earnings are slightly positive 10x trailing earnings will be peanuts. Even a trailing earning of say $50m means only $500m to takeover. Perhaps you mean 10x sales (revenues).

NewKOTB - missed that sorry. same thoughts.

Well, if you buy 100,000 times more you will I’m afraid (1% or more).

Yes it is required by the TO Panel.

And yes it is Double Dutch and not plain English. Unfortunately many contacts I have had the unfortunate responsibility of understanding and implementing are written thus.

Sheltie I concur. And that is why smart PIs can beat the pros at their own game if they think and reason for themselves. Blindly following the views of brokers, or even letting Mr Market overly influence one’s decision making, is a mugs’s game- IMHO - as it gives no competitive advantage to along term P investors. Without an independent view it is better to invest in trackers - they at least mostly outperform iis over 10yrs.

8.5s possible accumulation or disposal. 8.3 current holdings disclosed.

That is certainly my impression, but others may have a better insight into the mechanisms of short interval algorithm trading, shorting, hedging and derivative trading.

Interesting all the same- all those less than 3% iis we have been wondering about are showing their faces at last.

To add some flesh to (cf NewKOTB) code 8.3and 8.5…

“Rule 8 of the City Code also imposes an enhanced disclosure regime during public takeovers:

Opening position disclosures: Bidders, targets and persons with an interest in 1% or more of the target and, if the offer includes securities of the bidder, persons with an interest in 1% or more of the bidder, must make an opening position disclosure within 10 business days of the start of an offer period.
Dealing disclosures: Bidders, targets, their respective concert parties and persons with an interest in 1% or more of the target and, if the offer includes securities in the bidder, persons with an interest in 1% or more of the bidder, must disclose any dealings in target shares and, if the offer includes securities of the bidder, any dealings in bidder shares. Dealing disclosures by the bidder, the target and their concert parties must be made by noon the next business day; dealing disclosures by 1% holders must be made by 3.30 p.m. on the next business day.”

‘In the not too distant future a narrowing consensus of independent valuations will start to manifest itself.’

I think that this has indeed already started. Mr Market is influenced by this and he is saying…..

I concur with Seaking1 - what it is worth now to any owner depends on how much cash it will generate from now on. It all hinges, imho, on the growth in the Free Cash Flow and this is terribly sensitive to the assumptions made in revenue growth and associated costs. The way compounding works means that even small changes in the assumptions leads to quite large changes in any calculation of the intrinsic value. I ran some sensitivity calculations a while ago which indicate to me that, on balance, 700p is a not an un-realistic number that would leave any new owner a sufficient margin of error to make a killing especially if they think that their ownership will add value.

But I can well see how different brokers have come up with widely different estimates on valuation depending on their assessments of growth possibilities. How the BOD any takeover buyer see it is quite another question.

Bacchus will be pleased the winnings were spent on booze, esp. wine.. Your fellow SHs will be less pleased if the price goes down from here.

I still think some, like Poppy, may like to keep DT listed in the UK. Here is what sh said in April (The Times) about listing in the UK. But perhaps her evangelism has not been enough.

“I am often asked why we listed Darktrace in London. As a business founded and headquartered in Cambridge, the UK felt like the natural place for our initial public offering. It has a formidable heritage in cybersecurity that we are proud to be building on, from Bletchley Park to GCHQ, as well as a broader history of technology innovation, from Charles Babbage and Ada Lovelace to Alan Turing.

Many have questioned whether there is sufficient expertise in London to place an accurate valuation on innovative companies such as Darktrace. I like to remember that while the actual IPO is considered the “end” or “completion” of a process, it is really just the beginning.

For those who are bringing a new invention to market, or in our case creating a new market, there is a long education process that follows the bell-ringing ceremony. I am an evangelist for the UK tech sector and if we are to fill the FTSE 250 with a new generation of technology companies, we must not only get comfortable with but wholeheartedly embrace this education process.”

I believe the shares held in treasury by DT have no voting rights attached so in the case of DT there is a small difference in total number of shares in issue and total voting rights. In other companies, especially those held by original owners, there. are at times different classes of shares with different voting rights. In the case of Estée Lauder, for instance, the original owners have 10 voting rights per share and the ordinary shareholders 1 vote. And I think with Berkshire Hathaway, holders of B shares have no voting rights at all.

I really don’t know what the relevance is of metrics like 10x sales for growth company share pricing. It’s value surely depends not only on the present, but the sum of present and potential future earnings.

But to follow up on Petrobull’s calculation, if, for instance, DT grows at a rate of 40% for the next two years, then the calculation in two years time becomes:

£417mx1.4x1.4x10/709m = £11.5

Charles it will only be hostile if the BOD says no and they go directly to the SHs. So all friendly at the moment I suspect.

I think a SP in excess of 800p will only happen if others come sniffing and there is a bidding war.

The trouble, Bobocaca, is that this is one of the most interesting companies I have invested in and would not like to see it disappear from the UK like so may others. There are not too many unique companies like DT around. I would certainly vote against any takeover - not that will make the slightest difference. Mind you we all have our price, but mine is high.

Well I am not going to guess tomorrow’s SP or any offers price but suffice it to say an interesting company Is going to become even more interesting..I concur with NewKOTB that there will probably be other predators circling.

I am curious to see how the BOD will respond to any offer as I suspect Summit and KKR, who both have seats on the Board, will be keen to move on as that is what they do.