Member Info for m007j

Tullow getting drilled. How much lower can it go?

The stock is getting drilled today

Chid have you ever thought about giving up the cab driver job and becoming a professional investor? You would be amazing and would make so much money. You could start your own fund - Chid Capital.

Chid said this would happen all along. Between drop offs in his taxi the Oracle Delphi spoke to him about the type of redress scheme the FCA would likely propose and then Chid spoke to us. So lucky to have you on this message board, Chid.

#grateful

As an aside, for anyone looking for a UK bank which has an even cheaper valuation than CBG and tiny exposure to the motor finance drama, take a look at Secure Trust Bank (STB).

STB has said the potential redress and costs that it has in relation to motor commissions is just £6.9m (£5.2m redress and £1.7m costs), of which £6.4m it has recognised as a provision. This reflects two principal factors:

1. STB’s Vehicle Finance business terminated the use of Discretionary Commission Arrangements (DCA) in 2017, well ahead of the Financial Conduct Authority’s ban in 2021. Just 4% of STB’s Vehicle Finance commission payments used DCA.

2. Unlike the situation related to the three Court of Appeal/Supreme Court cases, sales by a car dealer accounted for just 20% of STB’s motor commissions, with 80% being paid through brokers and other introducers.

At today’s closing price of 908p, STB shares have the following valuation:

P/E Ratio 2026F: 3.2x

PE Ratio 2027F: 2.8x

P/B 2026F: 0.40x

P/B 2027F: 0.36x

What happened to the potential sale of the company? It is rare that you get an announcement about putting the company up for sale which in the months that follow push the shares down 20%.

Sadly IQE could easily halve from here. And it would still be worth £25m. I see little support for the share price. And as it falls bidders for various parts of the business are likely to reduce their offers. It is a viscous spiral.

Just a word as follow on to knot’s attempt earlier today to put the current valuation of CBG into context. CBG shares presently trade at 0.42x P/B. That is a substantial discount to the valuation of the shares even during the global financial crisis. Here is the average P/B valuation of CBG shares for 2007 to 2009:

2007: 1.6x

2008: 1.2x

2009: 1.5x

I would argue that CBG faces much less uncertainty today then it did during the global financial crisis when there were question marks about both the future of global banking and the future of the capitalist system. Were CBG to trade inline with the valuation it had during the global financial crisis the shares would be over £10. Just a thought.

Surely the FCA would not dare to tough it out and force the banks to take them to judicial review. Because if they did and they lost in the courts heads would roll. Surely it makes sense for the FCA to row back after the consultation period and say we consulted widely and now amend (water down) the redress scheme having received feedback from all stakeholders.

Thanks for that Chid. As always utter drivel from you. Go back to running your minicab and leave the thinking to those with some intelligence.

NiharRoy feels like you are just a day trader and not a long-term investor. When the shares are up the management is the best in the world. When the shares are down they are bad and working with short sellers.

Knot - yes the FCA redress scheme unveiled earlier this week has more holes in it than a Swiss cheese from a legal standpoint. But what now? What are the banks going to do about it. They can argue back over the coming weeks. But if the FCA dig their heels in then what can the banks do? Judicial review? Lobby the government? Is it knot best that the bank just settle and move on.

At 980p a share, and reflect today's earnings downgrades for 2026 and 2027, STB shares have the follow valuations

P/E Ratio 2026F: 3.5x

PE Ratio 2027F: 3.0x

P/B 2026F: 0.43x

P/B 2027F: 0.39x

Secure Trust Bank (STB) has very little exposure to the motor finance drama.

STB has said the potential redress and costs related to motor commissions is just £6.9m (£5.2m redress and £1.7m costs), of which £6.4m is recognised as a provision. This reflect two principal factors:

1. STB’s Vehicle Finance business terminated the use of Discretionary Commission Arrangements (DCA) in 2017, well ahead of the Financial Conduct Authority’s ban in 2021. Just 4% of STB’s Vehicle Finance commission payments used DCA.

2. Unlike the situation related to the three Court of Appeal/Supreme Court cases, sales by a car dealer accounted for just 20% of STB’s motor commissions, with 80% being paid through brokers and other introducers.

Is it an opt in or opt out scheme?

Feels like Mobico is about to stop paying interest on the perpetual bond.

Stopping interest payments on the Mobico 4.25% perpetual bond by itself would not cause an event of default on Mobico’s other debt facilities or banking covenants, which operate under separate terms and conditions. If Mobico stops paying interest on its 4.25% perpetual bond, it would not trigger an event of default on its other debt facilities. The bond terms allow for indefinite deferral of interest payments without constituting a default. Non-payment of interest on these perpetual notes does not cause cross-defaults on other debt.

Mobico perp/hybrid bond down another 9 points today to trade at 40 and yielding 20%. The senior bonds are holding up Ok and yield around 10%. What is going on with the perp? Feels like they are about to try and covert it to shares and maybe pay a little cash to holders.

The proposed new ID cards in the UK could be massive to the company! ME Group’s photobooths already provide ISO and ICAO-compliant photo ID services with secure, encrypted digital upload capabilities to government servers, including partnerships with His Majesty's Passport Office.

The introduction of compulsory government digital IDs will increase demand for secure, standardized ID photographs that meet biometric and security requirements.

Https://www.theguardian.com/politics/2025/sep/25/keir-starmer-expected-to-announce-plans-for-digital-id-cards

This should get the shares moving higher tomorrow!

Firepower1 has always held that it is key to look at hedge funds shorting a stock. This is why he is so negative on Mobico - hedge funds have a big short position in the stock and hedge funds know when shares are about to collapse. Hedge funds have an even bigger short position in Kingfisher. Today Kingfisher had results and the shares are currently up 18pct.

Firepower1 - he is a simple soul. And not very bright.