Member Info for LordAdam

I call this the "Eye of Sauron" effect. Those familiar with the LOTR films will know what I mean. Basically Trakm8's market making is done more or less manually and the price gets shifted around by the makers according to how they read the market in general and what they think should be happening with the share price. For the big, high volume, shares the share price is decided by the order book constantly balancing the buy and sell pressures and the various market makers systems optimizing their positions. At the moment the MMs are taking a pessimistic view and there really isn't enough buying pressure to force them to think differently. That's where the Eye of Sauron comes in ... in the Autumn time Trak benefited from a steady stream of media attention that kept a steady stream of small buying going along very nicely. Now the Eye has moved on and is distracted by what's happening in the rest of the market ... when the next set of results come out it will swivel back here and there won't be enough shares to go round again. As we've pointed out ... the future earnings are enormous for the present price ... unless you think the board are lying or mad ... plus they've never disappointed in the past ... the share price has to rise to well north of £3.00 in the short-medium term, and to £4.00 by this time next year. Of course if the FTSE-100 is down at 1000 again by then then all predictions are off! Mike

I've been thinking through the sequence of events last autumn again. In rough outline I think this is what happened ... Trakm8 has had the AA as one of its customers for some time ... the AA have been happy with what they've had and the results that they've seen from their own fleet management. The AA have a lot of SME type fleet clients ... companies with 5-50 vehicles. Too small for independent monitoring/planning and yet big enough to buy in the right management service for a reasonable price. So the AA discusses with Trakm8 the idea of working together to offer a client service, possibly with the AA brand behind it, possibly as a recommendation or partner type offerring ... we see a RNS about the changing relationship with the AA. Trakm8 see the size of the deal and its potential -- they are into recurrent, monthly cash flow type business and this is ideal ... its a ready made access to customers that are big enough to be of interest and too small for them to make sense of going it alone. They form a new division to handle the interface to the AA and its flow of contacts/enquiries. We see an RNS to that effect. Trakm8 take their most experienced sales director and put him in charge of the new division. This shows the significance of the new dvision to the future plans. Remember Trakm8 is going for recurrent income streams ... each SME signed up produces a nice gross cash income with very little marginal cost ... and that cash income continues forward through time. Again we see an RNS telling us what is happening. At the close of the year Trakm8 further extend their capability in this market place by acquiring route planning and scheduling technology. This is the missing link in the chain for the SME market ... with RouteMonkey's know how integrated into Trakm8's monitoring and camera systems the potential for a one box solution for the SME is there and the marginal cost of this to end users could be small giving Trak a competitive advantage and encouraging take up of the offerring. In addition RouteMonkey has its own customer base and sales leads that can be brought into the Trakm8 stable. Overall ... this is a major game changer for Trakm8 ... in the time scale of 12-18 months the right price for this share is about £4, once you wind the clock forward and factor in the growth potential of the following 12-18 months. Mike

If you look at the time of the trade ... 16:35 ... you'll see that its the closing auction and not a trade in the normal sense. It's basically the automated system closing out the day by matching as many of the outstanding orders as the market closes ... not really fair to think of it as 'one big' trade. Mike

Well despite all the banter about being able to see the future the honest answer is ... no ... there isn't a solid reason for the recent movements in the share price. The only observation that I will make is that smaller companies often attract 'speculative' type investment and when the market as a whole takes a turn downwards, is by its very nature, often one of the first places that folk take profits or protective action. A number of folk will be increasing their cash holdings in these markets and it doesn't take much to shift a share like Vertu ... todays is hardly a big volume day -- and there's a good indication of a large number number of buys (3 to 1 at the time of writing). Mike

Sorros, ... thanks for the figures they are the ones that I have lodged in my memory so I must have seen them somewhere along my travels. Having been through the accounts for period from 2012 again I must say I've reimpressed myself with the story so far. When folk look at the share price they see this high rate of rise and assume bubbles and ramping and bogus growth and all sorts of things ... but when you look at the actual accounts what you see is John Watkins taking the helm and then a steady, progressive, growth fuelled by sound management practice and an astute business model that puts recurrent cash flow for the present and future ahead of one-off profit. This is consistent, steady, growth over a very long period of time, arising from sound strategic choices and clarity of vision. I think I now understand what Trak are doing with Route Monkey, and if I'm right the value of this share is a lot more than the £4+ that the forecasts would suggest. Mike

I've just been doing some detailed work on Trakm8's figures from 2012 onwards ... Does some kind person have access to or can recall what the forecast figures were for the coming year end in March 2016 and the following year in March 2017. I have some figures lodged in my brain but I can't find my original notes or source -- I have a feeling that they came from Finncap the companies nominated broker/advisor. Mike

Perfect ... thanks so much for that link. I think one of the things that I like so much about investing in general and this board in particular, is that there's always something new to learn. And with learning comes understanding which in turn makes for a better informed and more balanced community. Milender -- thanks for the confirmation from the HL site ... I really should get back into looking there, at least periodically, it's a very nicely organised setup. Mike

Is my memory failing me or has the market size, the size of the parcel of shares that the market makers must quote for and deal in, reduced from 3,000 to 1,000? If the LSE web site has got it right and it was 3000 but is now 1000 then it seems counter intuitive to me. Daily volumes have been increasing and although it's still a tightly held share there's a lot of to and fro action to make a market in. I would have expected it to increase rather than the opposite. I might be cynical but it seems like the MMs protecting their patch to me. Mike

What is extremely interesting is that the market makers could have delayed the posting of this trade by at least 1-3 days ... and they didn't. That suggests to me that they are trying hard to suppress the price for some reason ... now that one I can't figure. The best I can do is that they anticipate a rise and are trying to buy in as much as possible for as little as possible. One thing is for sure ... the market is moving ... its been moving for a couple of days now, and things are only likely to get more heated in the aftermath of the recent rather artificial suppression of the natural price of this share. Mike.

33.62 at the time of posting ... and as FJGooner pointed out ... you don't seem quite so keen to post either positive news or movements ... ummm ... me thinks you have a rather fixed aggenda here ... Mike

Wow, what a great guess ... you were absolutely spot on ... amazing that this share should be somewhere between 72 and 74p some time in December and January I don't know how you did it! I'm so glad that I went overweight here, as I sit here enjoying the steady rise on its way to 85p by June/July. Of course, all those Honda franchise's that Vertu added to their dealerships last week are really helping to move the share along. I'm so pleased that we have got such accurate and insightful postings that we can depend on. Mike

Finally got to the bottom of when and for how long the posting the trade can be delayed ... it's actually set in Euros so the converted GBP numbers are a bit funny but here goes: Note that the delay is optional, but it's implemented automatically by the system if the market makers chooses the option: Less than £8,061 ... publish immediately (within 3 minutes) More than £8,061 ... delayed by 60 minutes More than £20,153 ... delayed by 3 hours More than £36,276 ... delayed until the end of the day (noon of next if in last 2 hours of trading) More than £48,368 ... delayed until the end of the next day More than £64,490 ... delayed until the end of the next but one day. Phew ... now, didn't you just want to know that? Mike

Yes, these delayed postings of large trades are a real bummer in terms of understanding what is actually happening in the market and what is really shifting the share price. (I've even tried collecting the data for several days and then using a spreadsheet to resort it into the correct date/time sequence to see if that helps!) One possibility is that the market makers are shifting a surplus of shares that they picked up at the 200p sort of level over the last few days ... and making a decent turn on them too if they are. There is another possibility ... back in the old days when we had the two-week account period it was common for jobbers (the market makers of the day) to run a surplus or a deficiency in their stock of shares and sort it out at the end of the account. That way they could take a punt themselves on how things were going to pan out and in reality influence the market as well by hoarding or shifting shares. I don't know what the rules are now ... but I suspect that there's not a strict one-in one-out sort of linkage between buying and selling shares otherwise the MMs wouldn't be able to make a market in all conditions -- and they are bound to accept a trade of less than the defined market size (3000 shares in Trakm8's case). Interesting times as they say! Mike

(Did a fast-finger-freddy on that one!) Given the reality of this specific situation ... its these small investors that I really feel sorry for ... they lose out and are put off getting into real investing. Mike

The lowest trade that I can find is ... 27-Jan-16 10:04:43, 281 Shares @ 195.50 at the time the bid/offer was 195/205 ... so that would make it a sell trade. I think this typifies a lot of the activity that has been going on since this hiatus started ... lots and lots of small trades. Do you remember last autumn when we were discussing just how many small trades there were for 100-200-300 shares sort of thing? Really small stuff at times, just a few hundred pounds worth -- seemed hardly worth making the deal with the costs and the spreads that these small parcels must attract. The conclusion was that it was pub talk or maybe investment club type activity. Literally small PI's putting £500 in, probably almost on a whim or a tip type of thing. Well ... now of course ... there's a whole ton of these folk, who, probably again without doing any real research of their own ... have been bailing out on the basis of the only thing that they can see -- the share price. It's a bit like going to a football match or big event ... everybody arrives over a period of time in a nice spread out fashion -- BUT they all leave together ... and there's grid lock for a while until it clears. Given the reality of this specific situation

Interestingly though ... the volume is not very high, and the spread has closed considerably ... the suggestion is that the market makers can't agree on what the price should be and their ranges are overlapping (hence the reduced spread). Looks like some of the MMs are net-buyers and some are net-sellers of stock at the moment. My feeling is that the reduction today is led more by the market makers than the investors themselves. We shall of course have to see ... like most of us long-term holders I've already emptied the war chest otherwise I'd be getting itchy fingers again. But come to think of it ... there is always the kid's piggy banks and the deposit for the Aged-P's retirement home ... Mike

My apologies for the double posting ... and for what comes ascross as a belligerent tone -- it wasn't intended to be such and shows a lack of finesse on my part. We're agreed that it's a matching process between those who want cash and those who want shares ... but a stratight one-for-one swap would give folk the cash folk 0.4454 of a share for £3.83 which would be a really rather good deal. So there's a strike price adjusment built into the offer and the way that's calculated is given on pages 44-45 of the scheme document. I can't work all the details out but it looks to me as though it's based on the closing price on the effective date. If I've got it right it should be as though the cash/shares were swapped on the day itself. Hope that helps to make things clearer or at least helps folk find where the real information is! Mike

There is a magic formula ... its on pages 44-45 of the scheme document ... and be warned it's both complicated and dependant on the share price at some point in the future. In essence it's a two stage process ... first there's a matching between those electing for extra cash or extra shares (and there may be a scaling back that occurs at this point). Then the strike price of the extra shares and their cash value is determined in accordance with the the scheme document. Nothing is left to chance, to interpretation or assumption ... it's all there ... it has to be if you think about it. As I say it's bed time reading / study for anyone that is thinking of that option. Me, personally, I'm going for the default ... although if anyone works through the scheme document and understands it fully let me know as I'd be interested in evaluating the all cash, all share options. Mike

There is a magic formula ... its on pages 44-45 of the scheme document ... and be warned it's both complicated and dependant on the share price at some point in the future. In essence it's a two stage process ... first there's a matching between those electing for extra cash or extra shares (and there may be a scaling back that occurs at this point). Then the strike price of the extra shares and their cash value is determined in accordance with the the scheme document. Nothing is left to chance, to interpretation or assumption ... it's all there ... it has to be if you think about it. As I say it's bed time reading / study for anyone that is thinking of that option. Me, personally, I'm going for the default ... although if anyone works through the scheme document and understands it fully let me know as I'd be interested in evaluating the all cash, all share options. Mike

You are right ... the man is a mountebank, a charlatan ... a pariah. I hadn't come across him before Wednesday and it took a little while for me to discover his background and his history and finally to unpick what he was saying. Not only is he completely with out credibility ... what he says is demonstratably wrong. It's nice to see that the market, after a brief "Ye Gods" sort of a moment has come resoundingly to the same conclusion. I'm sorry for folk who panicked and bailed out, they will have probably lost out (certainly in the long term) but for every share that was sold there was an eager new home waiting and we move on again. In the short term 300-350 seems to be the right sort of range/price to me ... in a couple of months, after the results, I can see us being in 400+ territory. Mike