Member Info for phenomenonnick

Sorry guys!! Didn't mean to kill the vibe!

Thanks for replying, Nomadic. I didn't say I didn't like it, but just having doubts and wanting to canvas views from people here as in general by definition most posters on boards are long the stock in question. Partly the doubts have come as a result of the total lack of response from the board since I had cause to contact them at the beginning of January. Paternoster is in a position to control what happens, to take part in a placing and get an enhanced return with warrants etc. Why wouldn't I invest in Paternoster instead (I have done both, but why wouldn't I switch)? PRS is at a huge discount to its liquid assets. PIRI is at a premium. Why would an RTO candidate pay a premium? It's placing a lot of faith in a board that seems to be rather sleepy and have a somewhat variable track record. Isn't it?

Ah gotcha. Maybe they found something with better prospects, or better value. Remind me why we all like PIRI again? The board ignores calls and emails, I've yet to catch anyone at all at their office, and, more importantly, isn't it still valued at a chunky premium to its assets?

Why are/were Gledhow unwelcome? (Relative newcomer to this one but got a fair bit at stake)

To be fair, end of Feb would be one quarter further along. That's no worse than the end of Nov update for Q3. And we're lucky to get quarterly updates, most quoted companies only provide six monthly results.

I guess what I'm really saying is that at current levels there's a lot more upside than downside. I picked up 1m shares yesterday taking my holding back to 3m. That's fairly chunky for me but not ruling out buying more on weakness.

Hi Chris. From the Companies House website, the public record for Magic Media Works Ltd, the company in which Yolo has invested. It's abbreviated accounts so there's no P&L just a balance sheet, but it shows the stock levels at 31 December 2015, I'm guessing they didn't sell many/any before the launch in November off the back of the Yolo investment. The margin is a total guess but I've imported vaguely similar products before and the manufacturer was reasonably open. Once you'd done the R&D (which is either written off or capitalised as an intangible) the actual cost of the components isn't huge, you can bet that in a manufacturing run of thousands, the components of something retailers are buying for say £100 is costing tens of pounds, say £50 tops. So 50% margin. For the 2017 revenue it sounds like that margin would have to be shared with the distributors, say they want 20% (they sell to retailers at £100, buy at £80) then EJ is making £30 on a sale at £80, so 35-40% margins. Should be incremental revenue on top of the current sales levels though, as the distributors bring new outlets on stream. And also handle warehousing, credit, etc.

crizmo I do think revenue must be at least in the region of £0.7m based on stock level in EJ's filed accounts. To sell £0.7m in 9 weeks is pretty impressive - is around £4m in annualised revenue once stock is flowing through smoothly. If EJ is worth 1x run rate revenue that's £4m, values our convertible loan at £1.7m. Could easily be more than double that. If a bit lower, still suggests the £1.4m loan is reasonably secure and we can get our money back. So, conservatively, YOLO has £1.4m in EJ, £1.0m cash, £1m Simplestream / TV Player, £0.4m Gfinity, £0.1m Audioboom. The investments are at least worth the current share price. The unquoteds could easily be worth more given the positive news on both. It could easily be a chunky cash shell for one of the unquoted investments, or a reasonable RTO candidate for something new. Add in the Nigel Wray backing giving access to interesting opportunities, and there can't be a lot of downside here.

Sorry meant £169 inc VAT, £140 exc VAT!

Chukkers - bear in mind Yolo doesn't have control of Electric Jukebox, it's just provided a loan which is convertible into a minority holding - albeit a substantial minority. I do think there are valid reasons of commercial sensitivity why the team at EJ would want the Yolo board to say as little as legally permissible without risking misleading the market. Still - at the risk of thwarting that desire, we can use the requirement to file public accounts and make some reasonable assumptions, to thwart their sensitivities! As per my earlier post we know the stock figure at 31 December 2015. I'm going to assume virtually none were sold prior to the launch, and in the first 10 months of 2015 they were trying to find an investor for the launch, not spending cash on making more stock. It's £140 inc VAT, so the retailer's revenue is £140, let's assume EJ keeps £100 of the £140, and they're on 50% margins. On that basis it's a reasonable assumption that revenue is in the region of £0.7m give or take for the 9-week period, and that this amounts to in the region of 7,000 units. Plus or minus a thousand or so.

Nikstar39 - true there's no explicit mention, but the 31 Dec 2015 accounts for Magic Media Works show stock of £344,367. If like a lot of electronics manufacturers they have roughly 50% margins, net revenue would be around £0.7m give or take. Pretty damn good in 9 weeks!!

At the risk of getting myself shot at here, Foxy is right to flag this. What alarms me most about these accounts is the share premium account. Investors have put in £3m prior to 31 Dec 2015, yet our £1.4m converts to 41%, valuing the rest of the business at £2m. So (even ignoring the effect of the pref share issue shortly prior to Yolo's involvement) the existing investors are taking in money that recognises the investment hasn't succeeded so far. If it's a hit of course then it could still all go well, but presumably they felt they were throwing good money after bad so were happy for Yolo to invest at such a low conversion price. As I say though, assume worst case Electric Jukebox flops totally, I still think Yolo isn't awful value at current levels.

Best not rise to it. It's true of course that if the business fails, there's a chance the assets of Magic Media won't be enough to repay the loan, despite Yolo having a first charge. However, a point I made a while back (admittedly at more like 0.7p a share) was that the market was pricing in the failure of the Magic Media investment. There's plenty of cash and some other investments too.

Is that the 2m shares at 0.21p? Nice. This does feel like a ridiculously undervalued share. My main concern is - if we're all right here, why does the CEO only have 16m shares? Why wouldn't you sell your house and buy PRS at this price, in his position?!

Yeah both me. Figured I might as well make Energy1's prediction about doubling my investment come true lol

Thanks both. We shall see! There's definitely something odd here - it looks like the underlying investments are genuinely worth more than double the current share price and are mostly quoted. Slightly baffled as to why it's this cheap!

Hi Energy1 - I presume that was me, I placed a limit order for 10m shares, it showed as partially dealt and from the value it was 50% dealt so that would be 5m shares. I checked a couple of hours ago and it said fully dealt, and looking now the 10m shows as being as 1346 so presumable that's when the other half of the order got filled.

Hi cityal, I guess the answer is that meaningful stakes in businesses, even AIM-quoted ones, can be hard to dispose of. At the time, Yolo hadn't got the big placing done and only had enough cash for a few months running costs (based on the March interims). Pretty irresponsible to not have at least a year's running costs in cash, and risk being a forced seller. They won't get all their investments right but hopefully they'll get more right than wrong. My hunch is the most successful one out of the unquoted ones will reverse into Yolo and the other investments will get sold off. Just a guess admittedly!

Yes - just followed - but I don't tweet about investments. Or anything much really! Looks like I got the 500,000 at 3.25p. Happy with that :-) I've just sold out of EVRH. I'm in YOLO but mostly cash.

That was me :-) Put a limit order for 1m shares. Got 500k fulfilled before it moved.