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There has been no online quote for 100 shares since 8.10am, no doubt due to the 5k buy above the ask at £18.45. Peel Hunt are advertising £18.40 on the offer, but there is nothing available. The real bid is £18.32 for size, yet at 8.43 Liberum saw fit to drop the advertised bid to £18...

The last time I can remember such an imbalance in liquidity was this time last year, shares promptly broke above the then £19.40 resistance on 6th April 2023 and didn't look back until they hit £23 resistance on 11th May.

Of course, fundamentals 1 year on are dramatically stronger, with an £84m increase in net cash (worth ~£2 a share), a 5 quarter track record of treasury income, an ongoing share buyback & imminent move to a FTSE premium listing. The macro picture is also steadily improving, with inflation seemingly tamed & interest rates stable, meaning conditions for business are much improved, which is of course positive for Alpha's underlying performance.

All in all, with a >15% FCF / EV yield, Alpha is incredibly cheap, which is almost certainly why liquidity has dried up... I think £25 a share would still be cheap, given FCF / EV yield would still be over 10%

Ps. Peel have finally moved off the offer, now it's NT for 100 shares at £18.45 with Invesco blocking online dealing. We're on the verge of a proper breakout IMO.

I thought it was notable that they didn't mention their North American & Asian regulatory license applications in last weeks report, which we know were started at lease a year earlier;

"Whilst we are only scratching the surface of the European market, the service providers we are partnering with are global, and have already expressed a strong desire for us to expand our offering to North America and Asia. These regions are currently outside of our regulatory scope, but with the benefit of the interest tailwind, we have taken the opportunity to begin regulatory applications in the US and Singapore. These applications are just one such example of our accelerated investment in scalability that is being carried out to secure our global expansion. Providing these applications are accepted, this will open up new revenue opportunities for the business, from existing partners who have already shown a strong appetite to work with us in these jurisdictions."

I also spotted the below Prequin research which was released on the same day as our results;

https://www.globenewswire.com/news-release/2024/03/20/2849698/0/en/North-America-is-consolidating-alternative-assets-as-region-holds-almost-two-thirds-of-global-AUM-Preqin-reports.html

And finally linking to the commentary on the main market listing;

"As a business that is growing in size, becoming more global, and gaining interest from increasingly larger clients, we believe a Main Market Premium listing will serve to further enhance our reputation and support our market penetration as we move into new countries and engage larger clients."

To me it all points to a launch into the NA market in the very near future. It wouldn't surprise me in the slightest if it coincides with the May uplisting, it would make a lot of sense & explain the ~14 month lead time from first announcement of the move to it actually happening.

Entering the worlds largest alternatives market armed as a highly profitable business armed with £200m cash would certainly be very exciting, and I agree with @Koolhead's vision for a NADSAQ / NYSE listing in the medium term, once they are firmly established in the US and revenues are substantially larger.

Solid buying that's for sure, it's just a matter of patience really, 250k shares a day / 5.5m shares a month will soon see off any sellers. Any guesses at the share price come end of September? With falling rates & an improving economy I'm hopeful we can get back towards £1

I was reading some comments on Stockopedia's SCVR yesterday and it struck me that there is a big divide in opinion with Alpha. There are a group of investors like we have in here who think this company is outstanding and offers unbelievable value at present. However, there is a quite obviously much larger group that are completely oblivious to the fundamentals, and who still think a £750m market cap for an 'FX business' is expensive by default. I don't think any non investor has the foggiest about how the ABS business model works and particularly what is driving the treasury income...

Funnily enough, I was in the second camp until the Jan 2023 trading update flagged the interest income and I spent a lot of time looking at how the business had developed since 2017. Once you do this and realise the scale of Morgan's ambition (and how much of the hard work they have already achieved) then this becomes an incredibly exciting growth story. Now it has been 'supercharged' with incredible cashflow, it's gone to another level - particularly given the share price.

The fact is, most private investors haven't realised that the fundamentals here are second to none, once the wider market does so, then Alpha won't be trading anywhere near £18 a share. Add in that fund outflow's which have been plaguing UK small caps for the last 2 years will likely reverse when rates fall + the UK ISA + other mansion house initiatives aimed at boosting pension fund investment in 'unlisted' UK shares + the move to the 250 (and tracker funds) and I think you have the recipe for huge appreciate in value here over the coming years. It's the strongest of strong buys for me.

Great points @koolhead which I'll reply to when I have more time. There was no quote for more than 1k shares at £18 into close, so a breakout looks very likely tomorrow IMO.

It's up because even a moribund UK market can't ignore cash generation like Alpha produced in H2! Shareholder equity increased by 31% in H2 alone and 56% YoY, truly stunning figures.

I note Liberum have another note out today, I find them hard to take seriously but here are some excerpts;

"We also note that by end FY25, adjusted net cash is forecast to equal c. 50% of market cap." - A truly crazy fact in it's own right...it would mean that FCF to EV yield for FY26 would be nearing 30%

"Our target price for Alpha is derived from a simple average of a target P/E multiple and a DCF for the core business plus a modest valuation (3x P/E) of the interest income. Our TP is 2675p, implying upside of 63%."

The target PE they refer to is 31x underlying FY24 EPS + 3x DFC P/E for the interest income, which comes to £178m / £4.25

Why on earth are they valuing it on an underlying PE basis when in the same report they refer to the fact that by the end of next year they could have half of yesterday's closing market cap in cash?!

A much more sensible method would surely be to pick a prudent EV/EBITDA multiple - let's say 10x and value it based on the forecast FY25 closing position.

Based on today's note, Liberum are forecasting £55m in FY25 EBITDA + £80m in treasury income. That would result in £135m EBITDA (as of today, the treasury income isn't classified as finance income, so it's not interest...), So £1350 + £335m cash = £39 a share, assuming 43m shares.

And 10x EV/EBITDA is cheap as chips for a business of Alpha's quality - note LSE listed mobile payment providers Boku & Fonix are valued at 21x and 17x EV/EBITDA respectively, and neither come close to Alpha's fundamentals or track record..

Pleased to see other operating income rebranded to something more logical & also the uplisting date confirmed.

Results are spectacular, how this is valued at less than £1b is anyone's guess, £89m PAT £198m cash and £700m cap is outrageous. It could easily justify a £3b+ cap on a better exchange. Just extraordinarily cheap, even vs other LSE listings.

Two things would rapidly change the picture here;

- Material director buys - CEO/CFO both currently own pocket change vs their basic + bonus packages, this doesn't encourage new PI's to buy and hold

- Raising a decent amount of capital to strengthen the balance sheet and remove the debt overhang. The finance charges are punitive for a company that would otherwise be heading for genuine profitability. They quote $3.6 to $4m for the phase 2 expansion and say they can finance this from current cash & FCF, however this looks tight to me. I'm not sure why they seem so against raising growth capital for expansion? Is it purely down to the share price being below where they would consider raising?

It's a really nice growth story, but with such a weak balance sheet they are one problem away from a crisis. It's frustrating and typical of the UK market right now, can you imagine how different it would look with say $20m net cash on the balance sheet?

Yes that's really useful to know and makes a lot of sense. Again this is something that wouldn't need asking if they did a CMD / investor presentation / any kind of investor interaction!

There are happy to sit on the bid at present, probably sensible if they intend to buy back 50m shares. Likely consolidate for a bit unless their tactics change

@Botak, totally agree with you about them investing in the likes of SOL & AVAX, same with Cardano & Matic in the last cycle. I find it bizarre.

Did you ever read the reasoning for G&K changing the tactics which were so successful in 2017? Back then they jumped on lots of listed projects early in the bull market and made bags on all of them, which then funded their investments in ATOM, DOT & ICP. Fair enough, NEO, BLZ & quite a few others didn't work out, but at least they were active in the listed space and newsflow was plentiful.

Today it's all a bit odd. There are dozens of investments which we never hear about again, zero transparency on their plans for the staking income & a definite lack of diversification in their portfolio of listed assets.

It makes the current share price / market cap hard to stomach, especially compare with the 6pn/ £10m cap at this stage in the last cycle... those were the days!

Sums up the state of AIM at present that TRX are trading at the same valuation as 3 years ago, despite clearly executing on all fronts and not returning to the market for capital. If this can break 70p tomorrow then it could rerate quite significantly IMO. Pre Woodford / Invesco dump & subsequent funding issues (which likely wouldn't have happened if Woodford hadn't gone to the wall) this was a £100m+ market cap which was a long way from profitability!

Nobody has responded to the point I raised on Friday; why did CVSG's EBITDA margins increase from ~17% in 2014-2019 to ~21.5% in the 3 years since Covid? They've made around £20m PA more in the last 3 years than they would have done if their pre Covid margins has remained the same...

If I'd looked at the financials here and seen flat EBITDA margins then I'd have been bullish, however it looks to me like they have indeed been benefitting from fattened margins which will have been coming out of the pocket of their customers.

I think the market is pricing in a return to pre Covid EBITDA margins, which would mean a sizable reduction in forecast EBITDA. This also won't be helped by the large net debt balance they have built up via their expensive / aggressive entry into the Aus market.

And again, market makers aren't influencing this in the slightest given the £4.4m volume so far today - this is a bulls v bears battle on the order book.

Baffles me who the little sellers are here day after day, are the market makers exchanging shares at bid to try to scare the naive into selling? There absolutely seems to be a 'retain control of the price at all costs' mentality, likely to keep it under the radar. News can't be too far away now...

Next week will certainly be interesting. Can they really risk maintaining the status quo with interest income given the current EV of just £500m? Guidance will be critical with the main market listing, IMO it's extremely confusing to report £115m in PBT and then tell the market that £70m of this should effectively be ignored...

I've thought about this a lot over the past few weeks and even got to the point where I have considered that maybe there is an underlying reason for their extreme prudence?

Something I've not properly understood is this; we know they earn their interest income from nightly sweeping of client cash balances into a lump sum. But why aren't clients bothered about not earning interest on their cash? Is Alpha effectively pocketing all client interest?

If this is the case then it could potentially explain why they missed their 2023 ABS bank account target by 50%...

Note that Wise returns a portion of it's interest income to customers, which potentially explains why they feel comfortable recognising the net interest income in their forecasts / expectations ... Also note that Wise has added another £1b to their market cap since Alpha started their buyback!

Of course, if Alpha had earnings calls or any investor interaction like a CMD, then things would surely be clearer, as these questions would have almost certainly been asked & answered.

And @ Magoo, I guess the key question is whether the auction would be happening if PAT hadn't submitted the NOA? It seems very coincidental to auction it only weeks after the threat from PAT become official...

@Gallmat, I totally agree. And from 6.5p the upside is comfortably more than 10x in my opinion. AIM is so unpopular right now that I genuinely don't think anyone is looking for opportunities like PAT, assuming they simply don't exist. If I hadn't been well aware of LIT then I very much doubt I'd have bought in, certainly not with conviction. And the flipside is that LIT didn't even RNS their investment here, so unless you know PAT are listed then you aren't going to buy in either!

Like you, the reasons given by India for not granting the license seemed very basic, i.e. this article

https://timesofindia.indiatimes.com/city/jaipur/rise-in-gold-prices-drawing-firms-interest-in-raj-mines/articleshow/80064983.cms

For LIT to do their DD and provide $13.6m in non recourse funding means we can be almost certain that the 'discrepancies in the name of the company' cited as apparent justification for not granting a permit for a mine valued at ~$1b, are utter nonsense.

The fact that the market cap is lower than the day the LIT funding was confirmed is also utter nonsese!

They can't simply bid their own shares up, as per the FCA rules, so they've taken when they can this week & that's fine by me. There has been a large buyer taking shares off a large seller most of the week, if that buyer wasn't taking 150-500k chunks (see delayed trades from Thursday, published midday yesterday) then FCH would have very likely bought back a lot more. Given the volume, I wouldn't be surprised to see some TR1's in the next few weeks.

Next week will be really interesting. You have to wonder where the share price would be if they hadn't been buying back as the selling pressure is near constant. I see Wise has risen further to £9.22, no doubt due to rates being higher for longer than expected - still hard to believe Alpha are happy to leave themselves so exposed to a low ball offer...

Nobody was taking their bids today at 48.5p so they has to up their buy price to 49p to get their fill. Excellent week with a rise of 13%, and with a mere 1.4% of the buyback completed - ~732k shares for £350k