Member Info for LorenzoLynch

LittleAston,

‘At 58p I will put the farm on it’…

As I have no farm, I’ll have to sell a kidney, my misses and the food out of my fridge.

Are you from Little Aston? I used to live there briefly, but I’m in Lichfield these days.

Alnwick,

Sorry mate, you are right.

It doesn’t recognise Slovene postcodes however, so I’ll drop them an email.

Their postcodes are a 4 digit number you see e.g. 3000.

Bhaveen,

If CARD stores are overstaffed, that’s a nice lever that Darcy can pull in the future if necessary.

As for the cards seemingly a little pricey, they seem to have gone up in other stores as well.

I’ve just sent a card to my gf in Slovenia with MoonPig (CARD don’t deliver overseas… another lever which can be pulled, and should be!)…

Cost me the best part of £9!

Likewise, in Morrisons it was £3 for a decent Mother’s Day card.

Both served as reminders to buy my cards from CF and to buy them early, so I’ll do a bulk buy of cards from CF for the year when I get chance.

On a side note, my mom (a real snob, if I’m honest) has recently started buying cards from CF instead of Clinton’s etc, because she now thinks the quality is broadly comparable.

I can only see CF increasing market share both in the U.K and abroad… lots of opportunity from growth in my view.

Sending cards overseas however is something they need to start offering.

Alessandro,

What would you do?

Didn’t JD mention the possibility of joining the NYSE previously, or did I dream that?

Is the World Cup not a tailwind for JD (and especially Hibbet)?

Do companies on the NYSE not typically attract higher valuation multiples?

My only concern with this company is a takeover bid while it’s so cheap. Even at a 100% premium (as rare as they are), I’d still feel robbed.

1 year (max) until we see a complete u-turn in sentiment imo. I’ll continue topping up along the way.

Agreed Rats

This has been on my watchlist for a while, and I had Monday pencilled into my calendar as the day the buyback would end (I expected the SP to fall slightly shortly afterwards, creating a buy in opportunity).

Anyway, can anybody with a strong knowledge of the sector and company explain to me how OTB can protect itself from AI in the future?

For example, surely AI will be able to package together some trailer-made packages soon, so where is the moat?

This aside, the growth potential is obviously huge, but AI is a concern for me.

As Buffett has often advised, I like to imagine where a company is going to be in 10-20 years. With OTB, I struggle to predict where it will be in 3-5.

Just trying to understand the moat.

Steve,

I’m sure they said the expected cost uplift is £14m…

So less than 3% of revenue according to my calculator. Therefore if prices are increased 3% on average, it’s a complete non-event.

… now compare that to the decline in market cap.

It’s laughable.

1) Continue as is, and try to reduce costs etc (the usual).

2) Continue to acquire good businesses if opportunities arise at the right prices.

3) In FY27, put a complete halt on acquisitions and invest heavily in World Cup inventory and marketing.

4) Announce very high guidance for the year once the World Cup has ended and forecasts are sky high (one would assume)

5) Once the share price has risen, around 1 week later announce that the company will be leaving the LSE and joining the NYSE.

6) Join the NYSE, and watch the market assign a sky high p/e to artificially high earnings.

7) Resign, sell my shares and retire a very wealthy man.

Just my thoughts and I how see things potentially panning out here. Pure speculation. Do your own research.

Remains my 2nd largest position.

The ASOS comparison is hilarious 🤣.

Yeah, there are very fine lines between a company making over almost a billion before tax and a company which has been making losses for the past few years.

As for falling to 64p… I’d absolutely love a nice top up at that level.

Who has been selling in the 70’s?… please let me know what else you’re looking to sell, so I can buy those shares of you as well.

Nickotine,

But is Jimmy not correct? This is the elephant in the room for me…

He told us he was going to swab the deeper sands in MOU-3 (which could give us an SP of £1+)…

Yet he now acts like those deeper sands don’t exist, and he’s targeting chicken feed.

What are the shallow sands worth? I suppose most of us might break even in a success case… how enthralling.

Mac/Wig,

A foolish oversight on my behalf, but that extra money should really help speed up the deleveraging process.

How the hell did you pair find this at 3p? Huge respect on that front, you’ve both played a blinder! I also don’t think the show is over by some margin yet.

Are either of you aware of any other comparable deleveraging stocks?

Blue glow,

You have just asked the most important question BY FAR imo.

How a CEO/MD can legally tell investors that he is going to carry out an extensive flow testing programme, and simply not do it? How is this legal?!

If PG told us ‘we’re only going test the shallow sands and we’ll test MOU-5 in a success case’, I’d have reduced my holding by 75% immediately.

As much as I’ve debated with the de-rampers on here, they have always been right about one thing: Paul.

His actions have been far more disgraceful than anybody on this board, and he has cost myself and many others much more money than anybody on this board.

ALL of everybody’s anger, frustration, disdain etc should be pointed in one direction.

For months he dangled the ‘swabbing of MOU-3’ carrot, which made it seem like our downside was limited, when on reflection, it seems like the plan was to maintain the share price whilst doing several placings. Little Nige has always had his number on that front.

In truth, I’ve never liked the man and never trusted him, but I trusted in the assets. Huge lesson learned….

I genuinely don’t believe a word he says anymore.

I remain invested, but my only objective now is to simply break-even from the MOU-3 shallow sands and/or TT and/or Ireland. Which reminds me, what happened to testing MOU-1 and MOU-4?

All of the above are simply my opinions, do your own research and form your own conclusions.

Mac,

Very valid point on the cash from those warrants. You’re probably right, it’s largely a non-event.

Wigwammer,

From ChatGPT:

Yes, the exercise of warrants can result in the dilution of shares outstanding. When a warrant holder exercises their right to purchase shares at a predetermined price, the company issues new shares to fulfill the transaction. This increases the total number of shares outstanding, which can dilute the ownership percentage of existing shareholders and potentially impact earnings per share (EPS).

However, the actual impact on dilution depends on several factors:

1. Cash vs. Net Settlement: If the warrants are settled in cash, the company receives additional capital, which could offset the dilution effect.

2. Antidilution Provisions: Some companies have mechanisms in place to adjust warrant terms to minimize dilution.

3. Market Price vs. Exercise Price: If the exercise price is significantly below the market price, dilution effects can be more pronounced.

Overall, warrant exercises typically lead to dilution unless countered by share buybacks or other corporate actions.

Wigwammer,

I’ve already factored in the warrants which have been exercised. Still looks like just under 8% of future dilution to me.

I think market is valuing the company based on its market cap vs net income, not on a warrant-adjusted EPS basis. Either way, if shares outstanding rise 8%, that would result in an 8% loss on that given day to shareholders.

What you choose to do with your money is your choice. I completely understand why you’re invested here. I’m content sitting on my hands for now as I think a better opportunity will arise.

Good luck all.

Wigwammer,

So when those warrants are exercised, shares outstanding won’t increase? I understand your point from a market cap perspective, but surely EPS falls, no?

My understanding is that even if nobody sells (and I wouldn’t expect them to), the share price still falls in accordance with the dilution from the warrants?

Wighammer,

When the warrants are executed, there will be c. 8% more shares outstanding, so surely the share price has to fall around 8% accordingly.

Regarding the numbers, at face value, I broadly agree with Tourist’s numbers AT FACE VALUE, but when I did my initial research, I saw a lot of things in the financial statements which were open to interpretation.

These are the things I need to get my head around, so that I can put my own projections together.

What is your valuation?

I’ll update my numbers when I’ve concluded my research.

Tourist,

I took a look at the income statement and if the numbers are taken at face value, I broadly agree with your calculations and estimates.

I think I was too conservative before, but I recall seeing some red (or at least amber) flags which could arise in the earnings moving forward.

I’ll dig deeper into them when I get chance and report back.

Thank you for the post though: it was good stuff.

Runthoseprofits,

Seafox own less than 5% of the company, but if they execute their warrants, shareholders will be diluted by around 8%, if my understanding is correct, when they execute the warrants.

I say when, not if, because there’s an instant profit for them (and quite a sizeable one) when they do execute those warrants.

Yes, the deadline is July, but why haven’t they exercised the warrants yet? My guess is that they’re still selling shares (and I include Seafox’s major shareholders in this, who will have benefited from receiving shares via dividend).

They will want the most attractive price for those shares, so I imagine they’ll refrain from causing any further dilution until they’ve finished selling.

In other words, I expect sales volume to remain high (suppressing the share price) until the warrants are executed. Upon execution, the share price falls 8% (or so) due to the dilution. Then the selling of shares begins again.

This is 90% of the reason why I haven’t invested in GMS just yet and why I haven’t been in a rush to revalue it. I also need to delve into the numbers more deeply, as I don’t believe that their earnings are as straightforward as many others seem to believe; this is a premature judgment however, and i doubt I’ll nail my forecasts exactly anyhow.

All in my honest opinion…. Happy to be proven wrong by Mystic Mac or anybody else

Sol,

I’m not a professional.

I’m not sure what relevance IAG has, aside from a small read across.

Of course the buying volume would likely be similar if another buyback is announced when the current one concludes, but I’m not aware of any indication that this will occur.

I have no idea which direction IAG is heading, but as it’s an airline (a very risky industry), it could easily go in any direction.