Member Info for Rofert

Why is the BoD not doing anything to show progress on the key issues that are driving down the SP?

News on refinancing, profitability, governance and structural reform would help.

I still think Administration is a possibility.

Are you really dismissing the possibility of Administration? It is not unusual for companies that have large debt, poor management and have misled auditors to go into Administration.

If Sidara were happy with their offer they would start buying and the SP would rise.

The reasons this could go into administration is that the banks could call their debt and get all of their money back, and Sidara get the company without liabilities. A happy scenario for the two most important players.

Just a theory, but more plausible than posts forecasting £1 per share.

Sidara might be waiting for a managed administration. Main creditors like banks get prioritised for repayment and it will clear out any liabilities which Sidara might be worried about. It will be the banks who control this not shareholders.

I know some will argue against, but why is the sp dropping and why no firm bid?

Administration is a possibility. If WG cannot refinance they will run out of money. A very orderly administration could be arranged with debtors getting good returns and Sidara buying the company without the liabilities. That is why the SP is not being propped by the offer.

If the WG could refinance they would have announced it.

The Charts say sell at 600p and wait for another sub 500p. If only it was that predictable.!

From the Telegraph - 'Klarna, ... has recently set up a UK holding company, an early step towards a flotation that could value it at more than £12bn.'

So what would that make CHRY's stake worth?

And now we have a rise to make up for yesterday's drop (almost). I wish the Board would explain a bit more and show that they have a good strategy to address the decline.

Or at least a rumour.

It is still climbing. Last NAV of 148p was prepared using 17th Nov prices so Wise has changed from 595 to 543 current. Wise only accounts for 2% of total value. I would like to think any scrutiny will make us more informed about the future value of CHRY but it sometimes defies logic. Next NAV in 4 weeks!

Let's give credit to CHRY. In the space of a week have gone from 63p to 79p.

Two RNS's in one day. The rearrangement of Jupiter's fees is very welcome. Also, an RNS providing better communication with shareholders about future value. Both should help to unlock the ridiculous NAV gap.

Jupiter have a lot to answer for. Chrysalis need to show that they are properly run for the benefit of investors.

So they received £5m for an asset they valued at £0 just 4 days ago. Great result.
But in the preceding 24 hours the price moved from 60p to 70p which smells.
I don't think the Board have good governance in place.

Probably insider knowledge. Historically, too many share price moves ahead of announcements. Board not transparent about activities.

The discount to NAV seems crazy. Why isn't the Board doing more to highlight value?
They should just sell up and distribute cash.

That is the least of its' worries.
Board should liquidate as FEET did.

The Board should consider it. The SP will rise and everyone can walk away relieved.

Is there a time limit on when they can sell. Are they still holding those shares?
More questions than answers with CHRY which the Board need to address before there can be any confidence.

I suppose they are saying it is a buy.

9th September 2022

Shepherding its portfolio through the storm

In its first three years, Chrysalis Investments (CHRY) generated significant net asset value (NAV) and share price returns for investors by building an exciting portfolio of fast-growing, disruptive and potentially market-leading companies. An abrupt change in sentiment towards these types of businesses has since impacted on CHRY's NAV, with falls in the values of listed investments and a notable write down in the valuation of Klarna. However, this is set against good news coming from portfolio companies such as Starling Bank and wefox.

In a market where financing for growth companies has become harder to obtain, CHRY is fortunate to have cash on hand from its first full exit to support portfolio companies, if needed. However, increasingly, these businesses are becoming profitable and cash-generative.

The extreme discount that CHRY's shares trade at relative to NAV represents a significant cushion against any further bad news. In time, sentiment will switch back, and if the portfolio lives up to the potential that the advisers believe it has, CHRY's current share price has a long way to climb.

Abridged version:
'You are always running a risk buying – or indeed tipping – an investment trust that is trading at a premium, and Questor’s advice to readers in June last year to buy shares in Chrysalis Investments at an 18pc premium has rather proved that rule.
That premium has now morphed into a discount of about 56pc. As is often the case with trusts, movements in the discount or premium amplify what is happening to the value of the actual portfolio – the net asset value – and in the case of Chrysalis, the NAV has also fallen severely since our tip.
Take the two things together and we are in the red to the tune of about 70pc.
Partly, in Questor’s view, this reflects the fact that the NAVs of trusts that invest in unquoted assets are updated with a time lag that usually runs to three or six months.
But there is nothing to prevent improved investor sentiment lifting the share price (in other words, narrowing the discount), and the fact that this has not happened suggests to this column that investors have given up on the trust.
This feels like the point of maximum pessimism – the best time to buy, even if strong nerves will be needed.
Questor says: buy'