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The RNS has been poorly drafted. Maximum potential 6.5% dilution over 4.5 years, lets forget the £35m cap. That's a LTIP of £7m for the top 42 employees over the next 4.5 years at current share price. The CEO LTIP at current prices is capped at £840k over 4.5 years.
10% performance fee with a 10% hurdle rate is reasonable, it's just been really badly worded.
Painful to sell at 0.3, but better to have a 10% return than £0
so much sell pressure - not fun to be a HODLer here
Perhaps these is a lock-up for new institutional investors and Board / Management wouldn't dare to sell.
I recommended the stock to a fund manager I know. He bought 5k shares at 95p for fun and the IR team was hounding them to speak about a larger investment... it all makes sense now
Fortunately left myself a second bullet to average down on this. However, I'm going to wait a few days before firing to let the dust settle...
BTC trading on plus very different now to how it was in 2017/18 or even 2020.
Firstly crypto leverage was capped to 2:1 in 2020 and secondly effectively banned for retail traders from 2021 onwards on Plus. I think crypto is a very small part of their book now.
Much more exposed to commodities and if I had to guess, I would say the big negative customer PL in the last 3 quarters was due to oils crazy run up and the US tech bubble.
Let's see how q1 goes, but I'm expecting it to be pretty much flat for their B book and they have already said that it's tracking ahead of q4 in terms of customer income
BTC trading on plus very different now to how it was in 2017/18 or even 2020.
Firstly crypto leverage was capped to 2:1 in 2020 and secondly effectively banned for retail traders from 2021 onwards on Plus. I think crypto is a very small part of their book now.
Much more exposed to commodities and if I had to guess, I would say the big negative customer PL in the last 3 quarters was due to oils crazy run up and the US tech bubble.
Let's see how q1 goes, but I'm expecting it to be pretty much flat for their B book and they have already said that it's tracking ahead in terms of customer income
13 April
I have an inkling that the trading update is coming tomorrow. I estimate revenue of $433m for H2 (up 53% YoY) and adjusted EBITDA of $80m (up 97% YoY pre IFRS 16 adjustments). Expecting a nice little pop tomorrow.
Also have potential LVS / Hard Rock acquisition opportunities.
GL to all holders for tomorrow
I think the reason it's trading at a lower valuation compared to its peers is due to the lack of clarity over customer P&L, including material miscommunications at the last crypto bubble and also the fact that investors can't trust Management / Founders, evidenced by the sell-off the day before Q4 trading update and Gal stepping down.
One of the main factors for Plus's success has been the involvement of the founders. Like other Israeli-owned companies in similar sectors (ie Playtech and XLMedia) who have gone through similar experiences with founders stepping away, I believe Plus is going to go through a relatively nasty transition period over the next couple of years.
However, who knows - I was writing on these board saying Argo Blockchain was a Ponzi scheme 6 months ago and now look at it!
Not joking - growth industry is weed. Dems controlling senate and house means federal legislation will come through. I was holding a load, but liquidated majority yesterday. Still a buy, Tilray, Aphria, GW Pharma, Harvest Health, Curaleaf - all exposed to US.
Emailed the board as well - so frustrated, even though I only had scraps left.
It's disgraceful. I sent this to IR team...
-----------------
Hi Rob
As a word of caution, I'm very disappointed as an investor to see the Plus management / co-founders back to their old tricks.
The day before Gal steps down and Plus reports sub-par results Alon decides to sell over half his holding.
Although I believe in the business, due to my lack of faith and trust in the management team - I have liquidated my entire holding.
Rob
Just frustrating, worst quarter ever for customer profit was Q22020, where they lost $80m, from $320m of customer income (25% of customer income).
I have no other words to describe Liberum's projections other than ******ed, assuming customer profit of 40% in a quarter where oil is collapsing...
The investment thesis is simple :
1. Cash balance of $725m at 30Sep. May rise to $750m by 31Dec, being netted off by dividend and buybacks - £0.6m net cash (vs market cap of £1.5bn)
2. Daily buybacks of £0.5m - equating to 1% market cap a month!
3. Consensus EBITDA of £400m this year, effectively 2x EBITDA multiple after factoring in the cash balance
4. GUARANTEED significant earnings beat. $50m revenue and $25m EBITDA is just not possible
3.
Well done the Plus IR Team, another tremendous display of stupidity. Q3 update today suggests:
- Q4 Revenue of: $48.6m
- Q4 EBITDA of: $24.5m
I would assumed they have already cleared 2020 consensus due to the fact that Q3 2019 was Revenue of $110.6m and EBITDA of $70.1m and Q4 2019 was revenue of $95.4m and EBITDA of $54.3m with HALF the customer-base.
Although we have an artificially inflated VIX, events like yesterday where you see a 2.5pc shaving to SPX show how temperamental this current market is. Due to a combination of US election / COVID / lockdown - temporary cancellation of sports.... Plus is still the place to be.
Forgetting that the company is buying up 1% of its shares every month!
I've topped up big on the news today ... GLA
https://www.coindesk.com/fca-bans-sale-of-cryptoderivatives-to-retail-consumers-in-uk
Effective from Jan-21. If I had to estimate.... UK Revenue is c11-12% of total revenue in the last couple of years. Crypto leverage has been materially reduced in recent months and apart from weekend trading is immaterial.
In worst case scenario and crypto trading represents 5% of total UK customer revenue - actual revenue hit is c0.5% at the most. Definitely does not warrant a share price decline of 3%
My estimates coming at revenue $370-380m, adjusted EBITDA $85-100m (could be wildly wrong with EBITDA). We are going to see a 2020 upgrade. 2021 upgrade would be great to see, but still v. exposed to UK and Germany - so may not come.
Will be interested by the current trading statement, from April to June they were tracking up c48% YoY, I anticipate this to drop - but if we are running up at around 40% YoY in H2, will be very positive.
I still think this is a v attractive M&A target for a US land-based casino. I know Hard-Rock were indicating M&A interest pre covid and could definitely be back on the table again. Certainly much more attractive with a full turnkey solution and no UK retail.
Good luck for tomorrow all...
Despite the tremendous results, acceptance by israeli authorities of reduced WHT, lower CT rates , 100m of rebates and R&D credits are very positive
Everyone forgetting impact of those bloomberg terminals updating properly.
H119 was a horror show and cash balance showing 292.9 which we know is just shy of 300m short of actual balance.
With a cash balance of 600m and TTM ebitda of c650m, we trading at equity value of 1.5x TTM EBITDA.