Member Info for NormaStits

Could still be published today?

Erm, that’ll be the issue of shares for the acquisition.

Ok Banbury, during my morning dump I briefly thought about this and came up with my theory, and it’s there to be shot down. It’s very elementary and a bit of Friday afternoon banter, fuelled partly by my growing concern that capital markets are heading for an absolute kicking as the private debt bubble bursts at some point in the next 12 months and the private equity ponzi collapses and ripples through everything.

With all of that in mind: No dividend has been paid to Mercuria in respect of 22. The last one they had was in respect of ‘21. As they now own 100m shares in SQZ, the next dividend they receive from SQZ in the coming months (along with rest of us) plus the cash consideration of the purchase add up to the level of dividend they would have been looking to extract since the start of ‘22. Then we’re all in it together.

I am not forensically looking at this as

a) insufficient time and data,
b) I can’t be a***d,
c) I don’t particularly care and am happy to wait for published financials shortly after Easter.

Banbury - worth just waiting for the figures? It won’t be long and then we’ll know. To my knowledge, none of us know the details of the SPA. My comments were generic as to how a locked box transaction works - not this one specifically. I tried to highlight the word “should” in my comment.

Was there a typo? No idea, but am sure it would have been picked up and rectified post-publication. The last alleged mistake in the Circular, highlighted on this board, proved to be a false flag.

Banbury, no theory on my part and I ain’t got time to hypothesise on this. I’ll wait for publication of the new combined entity’s financials. That’s the only point when we will have the facts which, ultimately, are what matters. Once we have those, one can try and reconcile but you will only see a fraction of the details.

Fwiw, I am not rose-tinted on this as. Per yesterday’s characterisation. Just willing to counter the overwhelming tone prevalent on this board. I have always maintained that there is much we don’t know and that my optimism could prove misplaced. I don’t think I’ve been a fanatical evangelist, but my optimism does remain.

Morning Banbury - you looking at the TW accounts or the NSV Energy accounts?

?

Locked box date was Dec 21. We don’t know the terms of the SPA, but there ‘shouldn’t’ have been any significant dividends paid outside of the target firm since that date. From the locked box date, the firm is basically managed for the benefit of the acquirer. That’s how they generally work, although again we don’t know the specific terms here. Maybe they paid down debt rather than pay a dividend? Maybe not…

Not blind faith Banbury. I do this for a living and blind faith is a trait lost decades ago as a youngster. Just happy to counter consensus and point to the other aspect of an argument. Fine margins permeate very investment opportunity. All the best!

Hello NewK. Fair point, but that doesn’t make it a ‘stitch up’. Also just commented on your debt observation. Atb to you too.

Why would it balloon at current interest rates? Is ballooning 2x 3x current levels on your opinion?

The debt levels out there in the corporate world, especially the non-bank lending, could well come to a head before too long. If the dominoes fall the wrong way, 2008 will look like a warm-up act. Allowing debt to balloon at this point would be irrational and insane…that doesn’t rule it out but I struggle to see it.

Ffs…they’re always guilty before the chance to prove their innocence.

Are you popping at me there upomega? I hope not, we’ve been there before. There seems to be some anger about a yet-to-be-announced dividend? Struth, just wait until something is said rather than fantasising.

Ha ha! Thought the same. “What’s this gas stuff again? How do you make it?”

What dividend was promised? I have no recollection of Mitch/BoD specifying a future level of dividends. Assume it was pre-TW?

Market just cannot hold on to any gains/confidence right now. Watching the S&P gyrate second to second right now. Just keeps skidding. Waiting for capitulation moment which, based on previous occasions, feels like it might be getting closer. Lord, I hope not…

Infor - how has KIST performed over the period without making an acquisition? It may have predated your time as a shareholder, but nobody wanted to accept the KIST offer…at the time.

Liquidity is fine, but the whole banking sector relies on a non-tangible measure, which is ‘trust’. There are suspicions rolling around about bank balance sheets due to withdrawal rates versus bond holdings that have fallen sharply. All you need is talk and chatter over a bank’s ability to meet withdrawals and the run can start. Once it does, it’s very difficult to halt. It’s usually only a big policy response that stops it.

Hello Banbury,

Not sure. If you track SQZ against HBR, very similar plots over 12 months. Hence not sure it is TW-specific. Showing our biases here. Let’s await actual newsflow and we’ll know soon enough.

Risk is rolling over everywhere and being indiscriminately offloaded. Hence I selectively buy it on days like this. Pricing becomes irrational but there’s no capitulation yet. That may well come. It’ll be interesting to see if US policy moves are made in the next few days. They normally cannot help themselves at times like this.

(Look at GBP v USD and then USD vs JPY to name but one simple and obvious risk-off signal.)

As noted on 22 Feb: “IMHO, risk will further sell off in the short term so will accrue more into/through a possible sell-off. Once this market down leg is done, I suspect we have grounds for a sustained upturn in equities and risk appetite.”

One never knows where the risk will manifest, but the damn always bursts somewhere. Multiple assets sell off and the market struggles for rational price discovery. There are signs of that unfolding right now. How many times have we seen this play out? I continue to systematically add risk back in, bit by bit. This is not a boast post, just an encouragement to those that are sick of a red screen and indiscriminate price destruction. That’s PRICE not value destruction. SQZ has been added together with I3E, EM corporate debt and HY bonds. The gold coins purchased in 2020 are also shining again.

Have faith, we know that this ends even if the how and the when are not clear at this moment.

Best wishes to all.