Member Info for lordloadsoflolly

What “math” might that be?

This is a currently loss-making company with a c. £120m turnover & a £670m market cap. Fair bit of growth already priced in methinks.

Correction: make that a 33% premium you’d need to yo be confident of recouping in swift order to justify voting against.

There’s a significant opportunity cost involved in refusing cash today in return for a potentially greater return at some future date.

Either way, RFX’s fate will be determined by their institutional investors who - according to this link - hold over 78% of the company. Whilst there could be an element of this 78% held as nominee for PIs, it’s unlikely to be that significant:

uk.investing.com/equities/ramsdens-holdings-plc-ownership

Given the c. 25% premium, you’d need to be confident you’d exceed this via dividends & capital growth to justify voting against.

That may be possible if stock markets & the gold price remain broadly buoyant. But it’s by no means a given.

Assuming no third party bidder emerges, the SP would logically drop back to around £4.50 in the event of deal rejection. Be careful what you wish for, however mean you feel FirstCash’s bid.

TheSoundMan - I’m also surprised, but mainly for a different reason. The market seems to think there’s little to no chance of a CMA referral. I’m not so sure.

In terms of holding out for a better offer, I doubt institutional holders will look a 25% premium in the mouth. In which case, whatever way a few PIs vote will likely make no difference I’m afraid.

Bazza - yes I am a holder, having reinvested some of my H&T proceeds here.

And whilst making over 75% in just a few months is great, I had intended it as a long term investment with a fairly dependable growing yield to boot.

I fully admit I didn’t expect a takeover here. And certainly not anything like as hot on the heels of H&T’s. I’m also surprised the SP has risen so close to the deal price this quickly, despite Director backing. If the CMA doesn’t investigate, when a potential quasi-monoply’s in the making, what exactly is it there for?

I’m tempted to take my money now & run. At around £5.90, there’s less than 3% potential upside with the current deal, even factoring in divis. And if H&T’s takeover timetable’s anything to go by, we’re talking at least another 4-5 months before we’d receive the proceeds. Unless the current thinking is that First Cash’s approach will flush out another bidder….

First Cash have no more clue how the medium-long term gold price will pan out than you or I.

H&T is as diversified as RFX, only the proportions are very different, with H&T generating far more of its revenue from the pawnbroking division.

RFX itself said one of the key reasons for accepting this offer was the role high gold prices played in generating their recent earnings surge. And the fact this could equally quickly & easily be reversed if gold prices retreat.

😂

Johncut - all that analysis overlooks the key point: There’s a huge difference between H&T & RFX, both in terms of loan book value and in the proportion of the total business which pawnbroking constitutes.

RFX’s business model is far more sensitive to the vagaries of the gold price, which though currently high has been volatile over the decades.

Span - LSE is always slow these days. All their stupid & highly dodgy looking ads make it unusable on older devices & slow on all.

As for Ezhik, methinks he’s being disingenuous. If you read the RNS carefully, quite apart from spelling out the benefits of 24/7 availability, it outlines the potential (though not the certainty) for the rig to be entirely self-funding if they can secure enough third party drilling contracts when Hex has any downtime.

Strong hands my rrrse.

If I read “weak hands” one more time I’ll scream.

It’s got ABSOLUTELY NOTHING to do with weakness or strength. Just one investor’s take over another’s. Theirs is just as valid as yours. And just as likely to be right.

The whole reason SMT is able to acquire holdings in these private start ups in the first place is because they’ve proved they’re in it for the long haul.

If they suddenly started ditching / reducing pre-IPO stage, that reputation would be lost. And similar future investment opportunities severely reduced.

Scotsgent - no need to thank me, but appreciated nonetheless!

Anything which obliges index trackers to add a stock to their fund will likely benefit that stock - short term at least.

More debatable whether it helps SMT, given the lock in period which creates value uncertainty. It shouldn’t hinder, but might just widen the NAV discount.

Scotsgent - SMT has frequently been buying back shares into Treasury over the past couple of years. That act alone doesn’t necessarily lead to SP stabilisation. Nor does it mean the current £14..00 - £15.00 level is automatically a floor.

They were doing it equally often in March, when the price was hovering around the £11.00 mark.

Adyan - yes, and that latest study was initiated by the NHS approaching Opti. Not the other way round. I see that as a very encouraging development.

Sadly, 2021 was not the time to be buying into SMT.

Had you done so 5 years earlier, you’d have more than four-bagged.

Timing & luck are key with this IT.

Grifter - they’ve only held those new warrants a few minutes. Time will tell how confident they are.

Ezhik - from memory, you've said yourself you've taken a deliberately prudent view with Hex.

And I believe you also told us you'd sold most if not all of your holding, much of it possibly at a higher price than the current one.

So I guess you might see risk where others see opportunity. And reality probably lies somewhere in between.

The only "pretty positive news" about these warrants is that they're so strongly in the money due to the hugely discounted price and the recent strong SP re-rate.

They don't indicate any vote of confidence from management whatsoever. Nor the opposite. Purely an opportunistic decision not to look a 75% discounted gift horse in the mouth.

Valuations - and so a company’s SP - are to an extent forward-looking anyway. They factor in an element of hopium as Ezhik calls it.

So the SP is anticipating further wells this year & beyond, building to 20+. You could say the 5x valuation factors this, but I’m not convinced it fully does in Hex’s case. Assuming delivery isn’t too far off guidance of course.