Member Info for Mr.Flibbles

sharehounder, that is true but we must not forget the pre-close trading update on Tuesday.

cteal, while your opinions are valid, you fail to include rising operating profits at almost the marketing cap. Don't be so dismissive afterall it is not one bider but multiple. Free cash flow (pre-dividends, refinancing costs and bond buy-back) up significantly to £83m is not to be sniffed at. Some of the debt that needs to be refinnanced will be replaced by cheaper equity if the private equity owners buy, allowing them to grow the insurance. business. If you take away the debt the business is worth 500-700p.

And so curiosity has bought us together :-)

robortsmith "can we read anything into all the RNS's?"

No, and certainly not before the SP has moved to reflect the facts.

deemule " It is a subject that fascinates me I do as much research as I can and try to pick up as much info as I can on the boards off more experienced traders and still find it complicated all smoke and mirrors."

deemule it appears you are taking a bottom-up approach to invest. It will not work. The institutions are better than you and I at this. Insituions understand the rules and quant data. However, as PI's we can ask the more qualitative queastions and instead of looking at companies bottom-up, look down from asset-allocation, to sectors and then to possibly individual stocks but prefer to look at tracker ETF's, index's, sectors and funds where you will easily stand the best chance of success. Investing now in the AA is punt based on qualitative question like a takeover, I think its OK to do.

I should add, I only expect the share price to go down to 24p should the AA balls the PE deal up. They are not in a position to raise equity so I am not sure why they bothered to put it in the RNS unless they actually believe it goes into the pounds (no chance IMHO), the previous CEO who now owns a boxing club should have done the placing at 400p. An official confirmed bid of 40p would send this stock very close to 40p and anything more is a highly speculative but welcome bonus. It pays not to be too greedy... 25p or 40p is to be expected.

robortsmith wrote: "why is the sp going down when we have a takeover battle?!?"

These are normal daily fluctuations. If the SP went down it would be more like 24p and you will feel it. If the share price goes up properly you would also feel it. I don't expect anyone who thinks like this to stay the full 4 weeks as the share price may never rise until the final week or it could rise tomorrow. Nobody will know.

Clemoc wrote: "Shorters are gamblers, holders are investors."
Clemoc, I assure you institutional shorters are not gamblers. Far from it, they often know more than anyone the vast majority of the time.

korvet wrote: "mm dept two floors down are holding the price"
korvet I assure you they can the MM can not hold the price, there is nothing it for them. MM's want the volume that all they can profit from.

A short can only be placed on an upswing and is typically a % of the free-float. So shorting does not bring the price down directly. But the fear of shorting can cause others to sell. I would not buy a highly shorted stock in normal times.

You can't say things like "Last chance sub 30s here". That is impossible to know. You can, however, say that the current trading is on the side of the buyers.

I only buy funds, but I am very interested in this company. There are so many variables. A private equity company can do so much with a brand like the AA who own's car and motor insurance book could grow very rapidly given the puny size. I recon the dual bit will have the roadside and the insurance SPLIT UP between them!

AA has played a blinder here and the AA is in the driving seat. As refinancing costs rise the AA had little choice. However, as PI's nobody will know how far they can go. The bidders will know how much they are willing to pay and I bet they did the research before C19 hit when the share price was 43p. I would say something in the region of 55-60p could have been pencilled in. I can only speculate like everyone here.

The interest payments the bondholders receive does make this deal profitable when converting into equity.

GLG Partners LP went under 0.5% declaration level with a short reduced to 0.34% on 29 Jul 2020. I think the spike at 544p could be them going to zero and a very large loss for GLG Partners LP. Good news for us.
https://shorttracker.co.uk/company/GB00BY7QYJ50/

I have added too. Selling down some other funds that have done well but now less attractively priced than GROW that is still trading at a discount, unusual for a software/tech fund.

And if not why not? I have just not got round to it. It is on my list of things to do as a holder of MERI.

Steph you raise some interesting points.

"I'm worried about a correction of the general US market but no so worried I am not fully invested." - As we come out of the C19 crisis money will flow from the successful C19 stocks into the recovery stocks. The C19 stocks may include those on "inflated" P/E ratio from Ocado to Tesla, from Games Workshop to Amazon. On a successful vaccine, the money will flow out of the C19 stocks into recovery stocks. This could be in a few months or 18 months! I don't know where GROW or other Private Equity funds sit as the upside is kept from blowing up like SMT (Tesla to SpaceX) due to independent conservative NAV valuations having such a magnetic effect on listed private equity share price.

"I think there has been a step change in the long term interest rates and thus a related step change in long term acceptable return on capital on stocks of P/E." - not a step change but destiny. Interest rates have been falling since loans had been invented, long before the invention of computers and electricity. Long term government bond yields are falling. Bonds are one day doomed along with banks who hold them (hopefully not the one I am invested in)... but you get my drift. All those crackpots asking us to buy gold will be proved right, though some also believe equities will be a bit like gold and the long term P/E ratios will eventually grow and grow to unimaginable levels.

Rudderless because at the time I had not yet received get the RNS 29th Jul 2020 and I had thought you had been commenting from a press report. I particularly like this bit:

Richard Watts, portfolio manager, adds: "The sale represents a significant moment for Merian Chrysalis. In the Interim Report we expressed our aspirations to move into the Company's second phase, the "growth" phase, with an eye on phase three - "realisations" - in due course. This transaction has allowed us to deliver on both of these goals: it has driven NAV progression, and also demonstrated our ability to recycle capital to fund future investments in the portfolio."

Steph, it looks like you are already in Starling Bank via the other fund. I have never come across FIPP so I will be taking a look at that.

GROW appears to be climbing up nicely despite the public markets cooling off and reconsollodating. I am holding off on rebalancing (selling) because of the share buyback and the strong software indexes (ETF's).

Steph, with interest rates set to never rise you may struggle with banks unless all you are after is a C19 recover bounce. The only bank I am invested in is Starling Bank. If you would like a slice of that and want to remain invested in TransferWise come and join me in that other disruptor fund. It sits nicely with GROW as GROW is a bit more early stage.

Hi Gewailla, you may be the most knowledgeable on MERI here. Richard Watts clearly has other priorities to his new boss and managing his new Jupiter fund than to help us. Co-incidentally it was AIM-listed Draper Esprit (GROW) who sold out of TransferWise as part of this deal and Richard has added GROW to his Jupiter fund. While I was not confused I enjoyed the NAV not being updated officially as I am accumulating equity since C19 hit. MERI indeed feels rudderless. But what a collection of stocks Richard has put together. Far better in my opinion that all other listed private equity.

Share buyback is used by funds to close discounts. They will benefit the share price as the NAV rises but also detrimental should the NAV fall. I already have a substantial amount invested in GROW, but I remain in an accumulation phase and I would have voted no for the discount to remain until the end of the year. I also believe the NAV would close naturally for a number of factors: (1) the closing of a 0.5% short (2) similar funds have narrow or premium (3) valulation of public markets

There is an RNS to say that MERI is trimming some of these TransferWise holdings and this should add 9p to NAV.

MERI trades at a premium to NAV and I have been selling. However, it is becoming clear that the NAV has not kept up with the listed sector typical of PE and the TransferWise deal. For this reason, I am adding again thanks to the large seller who has kept the premium to NAV acceptable.

A welcome sell for those in accumulation:
23-Jul-20
16:24:46
123.80
415,941
Sell*
122.00
128.50
£514.93k