The latest Investing Matters Podcast episode with London Stock Exchange Group's Chris Mayo has just been released. Listen here.
carvegyper - thanks for your reply. I now realise they are convertible notes, not convertible stock.
I've looked into it further, and it seems Carnival have no option to repay debt, either in cash or stock, since the 130% trigger ($13) means that holders can ask to be repayed. As you point out CCL have no cash to repay, so they are forced to repay in stock at the going rate of 100 shares per $1000 principal amount of stock. This is fixed by the agreement. It seems though that CCL are only credited with $8.73 because the rest is eaten up in fees. Nasty business!! The current SP has no relevance to the pricing.
The only redeeming factor is that at the end of March, when they also issued new stock, the strike price was $8.00. So actually they are getting a slightly better deal than issuing stock back in early April. But not much.
I think we've forgotten how dire the outlook was at the end of March, since now the outlook and SP has recovered a lot. But anyone who thinks they'll see over £20 in the next year is rather mistaken, in my opinion.
Carvegyber - not technically correct about 200% face value. The convertible stock was sold with the opportunity to convert at the original rate when purchased, a bit like warrants, I assume.
So whatever the current SP, the conversion rate is still $8.7 or whatever. I presume they issued the convertible stock at the time, because the market was in free-fall and turmoil, and stock was unattractive at the time.
The distress rates we are seeing now only reflects the position months ago. It's probably good they now prefer to issue more stock than pay a 5.75% coupon - the stock will have to be issued eventually if the holders want it.
I do agree with you however about the likely doubling of shares in issue by the end of 12 months, so a previous £30/40 SP now is only an eventual £15/20.
I'm with you carvegber.
The increased number of shares plus the fact there is massive debt to service means that the old dividend will never return, and when some dividend returns may only be around 50/60% previous even in 5 years time.
So my target for 2024/2025 would be around £18-£22. This means that I think fair value for now is around £11, assuming most sailing starts in the spring.
Gains and losses only occur at the point of sale. Then its the net gain for the year that may be liable for tax. So some find it worthwhile selling some stock at the end of the tax year to consolidate gains/losses and rebuy in the new year.
However the beauty of an ISA is that there's no tax to pay.
I've already made £16k capital gains this tax year on my fairly modest SAR holding. The SP was a mere 0.38p at the start of April. Get the "plain" shares into your trading account, and SAR etc into an ISA, before you make any more gains! Hope Monday isn't too late.
Answer:
Some poor MM (do pity them!) has agreed a large trade at around 1.37p, and now can't find any sellers. They will need to raise bid, but don't really have much room. So its stalemate for the moment.
Expect a decent rise in SP in a little while.
They're in the middle of an ATM offering of $1b - see info in PRN of 8 October.
That has already had its effect on the SP - see the decline since the original announcement was made. I've dropped my EOY target from £11 to £10 as a result.
SAR holders believe and trust (largely) the company's story of what is happening. They see large potential in getting further deals and have already received first milestone on 737. £1000 invested 10 years ago would now be worth £5000.
VAL is still suffering from the legacy of the previous management. We are not sure if any of the drugs are actually worth more than a few million pounds (at least without a lot more investment). But they might be worth lots. £1000 invested 10 years ago would now be worth £2.40.
I'm equally interested and invested in both. Both have the potential for further good gains this year, but don't expect similar Mcaps.
Patience is what is now required, please.
We are waiting for the equivalent of this document from March 2017, which will clear up most of the currently debated points.
https://www.valirx.com/events/valirx-plc-targeted-anti-cancer-therapies-val201/
Until then, it may be fun speculating, but I prefer now to hold the amount I am comfortable with, having taken some modest profits, and wait until later this quarter for the full results.
Yes, read it carefully
Its says, £2m cash, and we need to call an EGM before a placing.
Doesn't say no placing. That's what we're meant to imply.
There will be a placing if VAL decodeds to fund PII by itself. This may be unlikely, since it appears there are other prefered options.
inanaco - an extract of one of my posts from yesterday:
"Results confirm that the last 3 years extension of the trial has largely been a waste of time.
It has achieved (presumably similar) results to the earlier ones, with the extra information that the 8mg dose is safe (but no RNS info on the 16mg dose yet)."
The difference from 3 years ago lies in the re-invention of the company which may lead to a properly funded PII trial now. That's why I think the company is worth a lot more than 3 years ago.
VAL have reported a 54.5% success rate on a sample size of 11. Small sample we say. But how much does this matter?
The smallness of the sample can lead to non-significant results and therefore are not much use. A larger sample is always more robust.
In this case, using a simple Binomial model, I have calculated a range of values we can expect from our observation of 6 out of 11 "successes". There is a 95% probabilty that the actual success rate could be anywhere between 25% and 86% . This to me is very encouraging, because, even on our sample of 11 it is likely that a quarter of all patients would respond positively to the treatment, and it may be substanially more.
I look forward to the fuller data analysis, and further progress with 201, 301 and BC201.
P.S. I've added a few more today too.