Member Info for Lending

I looked at SR some time ago. It is a lithium play in Portugal and has some exploration interests ilmenite and copper. Lithium is interesting but decided it wasn’t for me and did little research. I worked in the mineral/oil/gas industry and have seen too many projects losing shareholder value. If you do invest make sure you research it thoroughly and look particularly at the capability of the management.

What a fantastic set of results from SentinelOne - DT has a real competitor on its hands. The ARR and RG growth figures of SO are sensational lending support to an accelerating demand - and 4x those of DT reported in the 15/7 RNS. DT have a lot of catching up to do, so bring on 15/9 and then let’s see how things compare.

Well Max -Different strokes for different folks I suppose. The original IIs are sitting currently on a three bagger while some of the old-school long term holders like me,- who buy once when the price is thought to be ok; and then hold while the fundamentals remain sound - are, for the moment at least, bagging or better.

GLA - It is great fun to be a co-owner of this quality and exciting company and, to me at least, it interesting to see the market dynamics at play and the different approaches to investing unfolding.

As you say Max, your time is sure to come.

HKK - I do not disagree that the risk will be low. In my opinion, the risk is low as the the probability is so extremely low that it outweighs the very real negative consequence to reputation were it to happen.

I don’t know how others envision risk/benefit but I see it as:
Risk = Probability x Negative Consequence
Benefit = Probability x Positive Consequence
Both concepts have been used extensively in the COVID jab debate.

HKK - I agree MF are fairly amateur in their journalism but, to be fair to them, DT in their IPO prospectus did not regard a cyber attack on their systems as trivial and they devoted a whole page (Page 12) to the subject.

ETF Managers and L&G have been buying recently and both now have >1% holdings in DT ( source Marketscreener) displacing Buffetology off the top ten.

Does anyone have any thoughts on the expectations of the market on the growth of the Annualised Recurring Revenue (ARR) and Revenue numbers (R) in the 15/9 update? The market seemed to be impressed by the forecast acceleration of the ARR and R growth in the July RNS.

As a reminder, actual and expected Full Year (FY) year-over-year for the given in the July RNS are:

ARR (adjusted for constant currency) Growth –--- FY2021 actual 44% --- -- FY2022 expectation 28% (mid figure) in IPO-----FY2022 expectation 33% (mid-figure) in RNS 15/7.
R Growth respectively ------ 40% ------- 28.5% ----- 30.5%.

According to Market Screener (unconfirmed) both Crowdstrike and SentinelOne have sales figure growths about twice that of DT. Given this and the demand for, and publicity about, cyber security, I would like to see a rise in the expected growth rate reported on 15/9 of at least 3 to 5% above the 15/7 update. This would good. The question is, though, what does the market expect?

What shares to buy is an interesting question as it depends, I would have thought, on what type of investor you are as the attributes would be quite different.

If a long term, buy, hold and forget type of investor like me - for the majority of my portfolio - then attributes like a high return on capital employed, high gross and operating margins, cash conversion, economic moats, repeat customers etc, are the most important attributes. This usually means established companies like Microsoft (dominant position), Visa/MasterCard (change away from cash) Adobe (growing digital content), PayPal (seems to me most on-line sites now offer this payment option), Intuit (niche focus), the beauty companies of L'Oriel and Estee Lauder etc. All are highly valued at the moment.

Next come those investors who buy into companies that have this type of long-term potential but need to be closely followed as they grow and action taken when appropriate- as is the situation Darktrace. I sometimes buy and sell on occasion as the fundamentals change, but do not actively trade on SP movements.

On the other end of the spectrum are those interested only in trading trading - which I am not. It would be probably be worthwhile following the pearls of wisdom shared by MaxDoom on this BB who seem to me to have a good appreciation of the game. If I read him correctly, volatility is the key. No better then than DT or similar start-up companies where there is still perceived uncertainty. DT seems an ideal example as, even though the pull of its future potential is undeniable, its growth trajectory is yet to be proven and it has a brake on its SP because of the perception, real or otherwise, of the risks. On the risks facing DT, I personally have never come across an IPO prospectus before that dedicated over 30 pages to an analysis of the risk factors.

Max - as I have noted with my own trades sometimes it records your sale- I guess it was yours - as a buy not a sell. Any reason for this?

Good on you MD - a live demonstration on the art of Trading - taking a position and sometimes going against the flow of consensus.I wouldn’t have a clue how to trade so will stick to trying to evaluate the factors that determine the value, rather than the price.

On the subject of SP manipulation, has anyone given any thought to what would happen to the SP between news on the fundamentals that concern the intrinsic value of shares if Technical Analysis did not exist.

Outside devious forms of SP manipulation - of which there are many - I suspect there would be very little movement as there would be no TA “events” to trigger the attention of Traders. It seems to me that the more Traders have access to the same TA information with the same identified trigger points the more likely they would be to take action on them one way or another.

Then if this were to be the case, would it not be that TA is the cause of SP movements in the times between “fundamental events” and not the prediction of that movement. In this case is TA not a form of manipulation of the SP built upon a belief system created over time and reinforced by a feedback loop?

Sacrilege I know.

G- my concern and thoughts mirrors yours. In the 1970’s inflation was allowed to rip in the UK by up to 25% to allow that debt to be eroded by inflation.
Shares and property seem to me to the only viable option at the moment.
ShelI I know well - it is facing a difficult transition.

Getagrip - interesting take on inflation and inflation is certainly harmful. However I have a different take on borrowing in times of high inflation and low interest rates. Taking your example, if inflation is 6% pa and interest rates are 2%, then the real term interest rate will be -4%. In this case the lender would in effect be paying for the borrower to take their money as their capital will be eroded over a year by that 4%. But of course if interest rates were to increase sharply above inflation that would be a completely different game and risk remains whatever way you look at it.

Ed - Share holders like us expect to get at least a 6-10% real term return on our investment so equity financing is expensive. So if companies can borrow money for a lot less than they get from investing in a project shareholders gain by the leveraging/gearing of the equity finance. But it is more risky - loans have to be repaid while shareholders don’t have to be repaid so a balance has to be struck. Utility companies borrow a lot because future cash flows are reasonably certain. Banks borrow most of their money so they are highly geared making them extremely vulnerable/risky if borrowers default as the 2008 events demonstrated. Shell is generally cautious with borrowing but will borrow for the reasons given and then rewards SHs with generous dividends.

Getagrip - my thoughts exactly. Free-float a floating!

Good news Nidec - that will allow ca188m shares capable of being traded.

I'm still curious to know where the extra free float comes from -FF from global offer 10.89%, from Summit sales 3.32% which leaves about 13% unaccounted for if 27% overall. Must be, I guess, from certain existing SHs at IPO not being subject to lock-up or some massaging must have taken place as implied, I think, by MaxDoom.

I'm also curious to see whether Incorporation into the FTSE250 will have any effect on the SP. PSH, as an example, went to great lengths to boost its value to get incorporated into the FTSE100, but in the end it had no effect on the SP or the large discount to net asset value.

Charles- There are two cases against ML - one currently in the UK and the other potentially in the USA.

The case in the UK is a civil case - HP is suing ML for damages in connection with alleged fraud. If found guilty of those damages the civil court will make a decision on any compensation but no fine or incarceration applicable. No extradition possible under the Extradition Treaty Agreement so this may be one reason the case is being held on the UK.
The case in the USA is about statutory fraud -a criminal matter heard in a criminal court. In this case it is the US authorities who are taking ML to court and, if found guilty, ML faces a fine or worse. Extradition is a possibility under the Extradition Agreement but politics may come into the decision making process.

Charles - On a point of clarification, my understanding is that under the US-UK extradition treaty one cannot be extradited to the US for a civil matter (Prince A) and this is why, I believe, the civil case against ML has been in UK courts. The law regarding civil/criminal cases is very similar in both counties. OJ Simpson (US footballer) was found not guilty of murder in the criminal court but was taken to the cleaners in the civil court later on when the evidence did not have to be so certain.

4t - agree it does not now really matter now but I like to understand these things. REUTERS article April (4), not May(5) as I stated, so it is now clear where the 20% figure came from. Also I understand that normally companies floating need to have a free-float of at least 25% but that consideration has been given - or has already been agreed - to reducing it to 15%. If only 10% it would be well below both these figures!

4tothefloor - You asked where I obtained the 20% free-float figure from. It came from a REUTERS publication (12/5/21) where they stated "free-float of at least 20%". However this did not seem to eventuate and the figure quoted by the FT and Market Screener is for 125.113,019 shares or 17.9% well in excess of the offer size of 75,942,439 shares or 10.89%. I'm seeking clarification and will revert once the difference is clarified.
So this still does not answer why four well heeled investors wanted to sell 23,150,000 shares, why they were allowed to break the lock-up arrangement, or why the IIs who bought the shares are not subject to the sme lock-up arrangement.