The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
*Share below should of course be Shard!
Hi Paulus,
Yes, and more importantly than my own opinion: you can see from the way that the 2nd largest shareholder, who called the meeting, voted against his own resolution 1, that he has been reassured that the chairman is actively trying to find a suitable transaction. The 2nd, 3rd and 4th largest shareholders voted in favour of adding the proposed new directors to the board, so you can see the 33m votes against is pretty much the entire Jarvis nominee account, in other words Riverfort (represented on the board by Nick Lee) and the Share placing investors. Those investors have clearly come in under the expectation of a lucrative RTO in the not too distant future. This has to be one of the best shells in the market. But then, I'm biased, I have a large holding myself!
I went to the meeting this morning - outcome being announced today when all the votes are counted.
Socialist your note prompted me to take a look as I'm in Digitalbox (new Polemos) and got a lot of grief for supporting the idea of an eventually-cancelled fundraising at double the current price, others thought that was too cheap to be "diluting" holders. Polemos had TWO loan notes, total value £879k, one to Oyster another to Securlynx their previous potential RTO candidate. Both were fully impaired in the 2017 accounts. Note 12 to the 2018 Polemos accounts (on the Digitalbox website) says the two investments were both sold for "a profit of £65,000" - given the book value was nil this means they were sold for £65,000. Of this £14k hadn't been paid at 31 December 2018. So it's hard to say but looks like it was barely 10p in the £1. So I assume that's what North Bay paid, which might give an indication as to a fair price for the Gun holding in Oyster!
Nicely done destitute. I don't really recall where I sold most of mine - higher than here but a loss, I suspect. Bought more a few weeks before the results expecting a jump and have sold them at a small loss. Not desperately optimistic, feels like if TV Player can be RTO'd that could make sense, but I can't be the only one to feel the current strategy needs to start showing some results to justify carrying on like this. Pity - I used to really like this one!
No idea why you think this means the directors are the only ones who will make money knicol. £300k is roughly the combined drawings of the directors of the three businesses prior to the RTO. So whilst there isn't a cost saving, this level of payment is already in the historic numbers. Looks like it should make north of £500k a year after director fees and can grow. Glad I sold most of mine at the equivalent of 26p but at the current price they seem pretty reasonable. I've added recently. Not my largest or most exciting holding but I think it'll do reasonably well for shareholders from here.
True - though as I say, not unexpected. That thing looked awful from the outset and YOLO hasn't really recovered.
Results out. Pretty much as expected. Huge discount to net assets - but no real reason for that to change short term. Would be good to see some chunky director buys to show faith in the strategy. Or let’s hope they find something decent to do an RTO with. TVPlayer perhaps?
exstatex - come on, let's have some proper discussion instead of everyone just arguing about whether negative comments are deramping or not. Ok, so assets are 2x market cap - £2m of assets, £1m market cap. So that's a £1m discount.
A year ago assets were £3m, market cap was £2m. So assets were a £1m discount then too. Hasn't stopped investors a year ago suffering a 50% loss.
We can argue about the investments and how well they'll perform. But what's going to close the £1m gap between NAV and share price?
Come on optimist - really keen to get your take on this too.
Not entirely sure I see the relevance?
Yes I broadly agree. I was in this at 3p pre-suspension, was amazed to be able to buy a load more at 6p when it relisted. Took profits on a bit of that at 8p but think I need to have the courage of my convictions - no guarantees they’ll be the winning firm in this space but it’s a distinct possibility, so I’m tempted to put a bit more in on dips, as you say.
Just looking back at some old posts and here's what I said 10 months ago when the GUN share price was DOUBLE where it is now:
"I see value here which is why I'm invested. I'm nothing like as positive about this share as Optimist is but he presents the positive case for GUN eloquently and from a heavily invested position. And he does it comprehensively and with sufficient regularity that no-one else need to!
I don't think I'm a detractor but in Optimist's eyes I must be. I guess I just come back to the point I made some weeks ago, that Gunsynd is a part time board and an admin person, and there's limits to what can be achieved. So I'm sceptical that we're being gifted such an apparently hugely valuable asset, in return for a little bit of HH's time. If either one of Oyster or Fastbase float in the next eight weeks like they're meant to, I will be amazed. I note neither have yet appeared on the London Stock Exchange page about AIM new issues, unlike others coming later this month.
I suspect we'd be better off finding a single exciting business and using the GUN shell for an RTO.
Still feel the views I expressed in March (that GUN will continue to trade at a huge discount to NAV and that Fastbase isn't going to be a bonanza) continue to be the most likely set of outcomes. Mind you, I hope I'm wrong."
Annoyed at myself for not selling out sooner despite calling this correctly. But, the more interesting point is - isn't it time the board ditched this value-destroying attempt at random investing in ridiculous gambles, and got on with using the quote and assets to get a decent RTO underway? Anyway care to make a bullish case for carrying on doing what we're doing?!
Eh? Shaun88 how can you say WH Ireland are definitely working on the IPO? The quote you include literally states they AREN'T working on it. Presumably they're going to start at some point, and will rapidly discover that if even GUN are distancing themselves from it, an actual Nomad is going to run a mile when they start the due diligence.
Kind of irrelevant to GUN's future now though. I'm glad they've walked from FB. I'm no longer as bearish as I was. But the fundamental problem that I set out a year or so ago remains - it's a small investment company trading at a chunky discount to net assets. If they intend to stay as an investment company, why would they ever trade at anything other than a chunky discount to net assets?
Thanks. A bold move, some might say foolish lol. We shall see. Good luck here.
Ah! I’m sure we’re all relieved to hear you’re playing not ramping ;)
Yes I’m fairly obsessed by PIRI - like GUN I bought in 2-3 years ago. GUN’s been pretty grim over that time, I’ve traded it so not too bad but definitely down. PIRI I’m level - I’m also apparently the third largest shareholder. So it’s rather important to me.
I guess I’m PIRI’s equivalent of optimist lol
You’re positive again risk? Good to hear that. Pretty inconsistent though given on Wednesday on the PIRI board you said “GUN is a POS, just good trading on every ramp”...
ECO is tanking?! It's down 6% on profit taking from incredible levels. ECO could HALVE from here and it would still have outperformed GUN in 2019!
Risk, how can you say that? This company's main investment is up SIXTY percent - in about sixty days!! They've done a massive placing and the sell price is 33% higher than that placing price, yet barely anyone has sold out. There's corporate action going on that will either see a new board appointed or remind the existing board that shareholders are keen to see an RTO happen.
Either way saying it's "lights out" is just silly.
More broadly I genuinely don't get how you can be bullish on GUN and bearish on PIRI. Takes all sorts to make a market.
Time2Buy (and Optimist as the main bull here) surely you'd agree that link is just awful. It's got to be criminally misleading hasn't it? A casual reader would think FastBase is one of Goldman Sachs' top stock picks of 2019, would they not?
OK, I guess that means they're confident they can keep acquiring - at least, that operationally they can cope. If they can't get the share price back up it could be a struggle to make the finances work. But looks like a decent and profitable business. If they can improve performance this looks a fair share price and let's see what they can add.