Member Info for NGR1616

It’s an encouraging article. Tells us nothing we didn’t know other than their opinion the only outcome is bonds. Payment of/via bonds will promote a willingness to pay and play by the rules and encourage investment that not paying would never come. For BUR the bonds would be payment yes… but if Argentina subsequently starts to play by said rules the value of those bonds will increase and potentially quite substantially. BUR will have options to keep it as an asset to borrow against or they can sell it.

The other possibility is there is no positive news and someone found out and wants out ergo the rise is a precursor to bad news rather than good.

Thanks Vegata you made me a few quid posting that article.

I've been in and out of this share more times recently that someone visiting Bonnie Blue. I just bought before the spike purely coincidently after reading the somewhat biased article posted earlier due to that basic human instinct of FOMO. Let's see what this Donkey can do....

Definitely if a24.48% rise is anything to go by.

Couerdelion you are correct the after hours trading was higher but it subsequently went lower with more after hours trades. It's currently sitting at $13.64 which is 4.5% lower than close and equates to £9.90 versus BUR:UK sitting at £9.965 at the time of writing.

Yes indeed but there were after market trades and currently NYSE:BUR is equivalent to £10.13 ($13.95/1.3768) so only a few cents difference

I think the US market was still trading after both announcements and was up 22% on the day so todays rise on the LSE is in line. I'm optimistic there will be some more buying but I don't expect anything significant on open.

There is still some uncertainty around the bill. It's a complex matter. The RNS wording is as usual open to interpretation:

"The Senate Parliamentarian ruled that those provisions are not eligible for inclusion in the bill"

That doesn't mean other provisions can't be put forward which are Byrd compliant and until there is no ambiguity then some risk remains.

Trading volume averages in the US are now circa 3x that of the UK. Yesterday they traded 14m shares after the Preska ruling, which was around 9x US avg volume.

In the UK this morning only 250k shares have been reported (could be much higher off book/delayed) but it tells me the UK market is not the one that drives the price, we just follow what happened in the US yesterday on the Preska announcement.

The bill drop it would seem has not been fully digested this side of the pond.

*$2.5m interest per day accruing

I agree.

The adage "sell on the news" means a stock actually declines when news is announced confirming what was expected. Yesterdays news might have been expected by some but certainly not by the market as we'd seen the stock decline due to risk on the tax side rather than rise in anticipation of it being dropped from the bill. The Preska ruling was also somewhat unexpected so together I anticipate some profit taking but in reality the long term investment case has strengthened as tax matters appear to have been addressed, and Preska is showing a clear intent to ensure the ruling in enforced and the creditors are paid. $2.5m tax per day accruing......

..

In other words the impact is no worse than standard corporate tax. We shouldn't be worried if an amendment is announced in my opinion.

The current of the bill for tax provisions is not Byrd Rule compliant for a number of reasons. It's unlikely an amendment will be made in time so it's more than likely dropped as noted yesterday and in the RNS this morning. However there remains a chance of an amendment but to be compliant it will not have a significant impact on Burdford and would be on income not gross proceeds and would be at a far lower level that the 31.8%. It could be re-introduced as a separate instrument targeting revenue.

My own intelligence ;-) created this illustration of the impact on Burford winning $100m after investing $20m in the case - an $80m profit for the initial draft of the bill, the watered down version and what a 'Byrd-safe' revision might look like:

Scenario Taxable Base Tax Owed Net Profit % Hit vs. No Tax

Original Draft $100M (gross) $40.8M $39.2M ▼ 51%

Watered-Down $80M (net gain) ~$25.4M $54.6M ▼ 32%

Byrd-Safe $80M (net gain) ~$21.0M $59.0M ▼ 26%

Up 20%….

I’m not so sure. Burford can really only update us on what they know. The knew about the senate bill and informed the market accordingly. What’s happening now is well informed speculation that we hope results in the bill being withdrawn or not passing but until that happens i don’t expect Burford to say anything. When it is officially confirmed as we hope I expect a fairly good re rate to £11+

Very encouraging. Should relate assuming the bill is removed or significantly amended and even then it might not pass.

I think that’s a sensible fund position.

The difference between us and them is we can reverse our position in a single or a few trades without cratering the price. II’s can’t do that when they hold millions of shares in number or value. I expect they and others like them might sell into those seeing the bottom and until there’s clarity on the tax situation we’ll see the same trading patterns….but ultimately with a downward trend.

But there is value in this company and I’ll not be surprised in the least when they domicile again outside the US to avoid this bill.

I stand to be corrected but it's a proposed 72% rise in tax on profits from 23.8% to 41% - which paints a slightly bleaker picture.