Member Info for ShearClass

Very solid results indeed, and always nice to see;

"Expect to finalise terms of California contract in Q2, resulting in revenues ahead of 2023 market expectations"

Also liked;

"In the US, our focus on State-wide contracts, coupled with the rapid progress we have made in Pennsylvania and California, has the potential to significantly change the growth trajectory of Kooth as more States take action to prioritise youth mental health."

Would be great to get through the technical resistance at 245p and moving up towards £3 before the big contract is finalised & RNS'd

The EKF Diagnostics CEO was asked about RENX at the 33 min mark in a presentation last week & had a fairly bullish opinion;

https://presentations.investormeetcompany.com/investor-meet-company/EKF-DIAGNOSTICS-HOLDINGS-PLC-Preliminary-Results-a273d8b9502f825d8608703e?bmid=449523c9ade5

Makes sense to me - why waste time on the reclassifying it if they weren't going to approve it?

In their first interims post IPO they had $61.6m, so they've used around $36m in cash since.

And also not true re. TM17, in their full year results released earlier this week they made £49m operating FCF and spent £26m on capitalised software development. TBLD made $19m in operating FCF and spent $36m on capitalised software development. Quite a difference.

That might be fine in isolation, however couple it with aggressive spending on acquisitions + the strategic expansion into TV production and it looks a bit out of control.

Oh and those trades were 100% not rollovers, rollovers have no impact on the price whereas shares fell 30% in early Feb...

I found the presentation very revealing in terms of why the share price sits where it does & why cash burn has been so high. In short, I don't think the CFO has anywhere near the required experience to be heading up a listed company. IMO some of his answers to questions were very poor, particularly the one about dividend payments to non controlling interests, which seemed very awkward & bordering on making it up.

Looking at LinkedIn, he joined TBLD as a finance manager in Dec 2018 & was then promoted to Director of Finance & HR before assuming the CFO title just before listing. Prior to TBLD he worked at a construction company & an administrators, he only graduated in 2013 & doesn't appear to have a finance or accounting degree...

I'd guess that the CEO doesn't think finance / accounting is important & would rather have someone that does as he says rather than a CFO who actively controls the financial performance of the business & says no to him. Pretty crazy for a company valued at £100m today & a huge contrast to the CFO's who head up FDEV, TM17 & DEVO.

Bottom line is I very much doubt he has any input into the acquisition decisions & as such the cash burn is being driven by the CEO's ego. A dangerous situation for a PLC & I suspect this ship is heading for the rocks. Won't post here any further but will watch from afar, good luck to all those who continue to hold...

Sangijuelas1, I'd say you are exceptionally bearish with ridiculous comments like that...

Aiven raised $210m last May, what has changed since to give you serious doubts about traction?

Likewise Coachhub raised $200m just 10 months ago, so despite your opinion it clearly has something going for it...

Revolut is what it is, I'd offset any decline in their NAV their with a likely valuation increase in Ledger, which has been in huge demand since the FTX meltown & is on the verge of releasing a major product upgrade / has few real competitors in the crypto hardware space.

Again, the point I make isn't that this shouldn't be trading at a discount to NAV, it's the size of the discount that looks extreme.

Oh and almost every tech company going has had lay offs, so you can't judge anything by that - are Microsoft in trouble because they cut 5% of their global workforce?

I agree with your point that the current level of interest rates shouldn't impact VC investment into innovative tech companies, after all the valuation CAGR of a successful Series A investment is a country mile above any return available from simply sitting on capital for long periods of time (particularly with inflation at over 5%). The huge volatility of the past 12 months has clearly refined the landscape though & made it much much harder for average companies to raise funds from VC's at what they would deem to be fair value. That isn't necessarily a problem for GROW but it does impact sentiment & create huge uncertainty.

My belief is we'll see calmer waters for the rest of 2023 as inflation gradually calms down, driven by the huge fall in wholesale gas prices and this will allow quite a few tech IPO's in Q3/Q4 because a partial IPO exit for VC's / founders will be deemed a more attractive & lower risk option vs taking on further funding as a private entity via a down round. VC's will then use the exit capital to reinvest into earlier stage ideas & the market will regain some confidence around valuations. Of course the IPO's will need to be priced competitively, however that shouldn't be too difficult given some of the crazy valuations awarded during 2020/21.

On GROW's valuation, I can't see the logic of it trading at 32% of NAV vs Chrysalis at 45% and Augmentum Fintech at 62%, to me that presents a solid margin of safety & a very asymmetric risk / reward profile...

Agree Steph, I added again this morning as I can't see any reason other than chart technicals for this trading so low.

If you look at the 6 month chart you can see a messy head a shoulders pattern, with a neckline at around 330p. Head and shoulders technical patterns are never textbook, however broadly speaking the left shoulder was formed during the bounce back from October lows, the head during the January melt up & the right shoulder in mid Feb.

The neckline is critical support in a H&S pattern and when it was decisively broken during the SVB rout the probability of a double bottom around 260p increased dramatically. Quantitative hedge fund Worldquant were short here last October & reached a peak short position of 0.6% share capital on 13th October, which happened to coincide with the all time low at 240p, see here; https://shorttracker.co.uk/company/GB00BY7QYJ50/

They then got nailed (hopefully) during the aggressive snap back in early November which saw shares double from their lows. My bet is that they have been repeating the trick over the last few weeks since the H&S broke.

When the NAV is confirmed in a few weeks time, volume will arrive and this will bounce IMO. It simply doesn't make sense for a diversified portfolio of preferred equity investments to trade at 32% of September 22 NAV. I'll add a few more thoughts in a second post on fundamentals...

Meh, I literally posted evidence that shows your statement is wrong but not going to waste time arguing...

Post July inflation will start falling rapidly & GROW will surely be a great way to leverage this theme.

Not true re. automated trades, there is a bot dripping tiny AT sells & has been all day;

- Of the ~300k shares traded today only 87k have been AT's (29%)

- There have been 697 orders through the book, of these 257 have been AT trades for less than 100 shares each

- I placed a 7.5k share order just after 1pm and it was being filled by sells of 33 shares each around twice a minute for 15 mins before closing out with proper sized orders.

It's market manipulation really, designed to give the impression of lots of people wanting out.

Sub 240p is possible and happy to add further at those levels, ultimately the lower it gets the larger the upside when NAV is reiterated in the April trading update.

I suspect the seller is an algo programmed to force shares down to a double bottom / technical lows (covid lockdown day very briefly hit 257p), plenty of PI buys today having little to no impact vs order book & background mechanics.

At 260p this trades at just 31.3% of it's last reported NAV, when you bear in mind that controversy bound Chrysalis trades at 39.5% & Augmentum Fintech 62.5% it's seems a bit illogical for GROW to have fallen so far. Surely an opportunity...

Good summary Simon. It's quite a coincidence that the COO & 7% shareholder is leaving with 'immediate effect' and just a few weeks earlier a huge number of shares were dumped by a mystery seller. Some were bought by Amati & Franklin Templeton, but the rest remain MIA & there is clearly still an overhang in play.

Has Mr Burtis sold his holding and not told anyone? This absolutely needs to be clarified on tomorrow's call IMO.

NGR, you are plain wrong, their quote from 14th April 2022 research note is below;

"Although the value of a potential payout has not been disclosed, we calculate that lost revenue in the United States
attributable to the patent infringement to date could be in the region of US$200– 250m or more. Any damages awarded could also make an additional allowance for future sales of infringing TVs and a possible uplift for wilfulness."

United states
'To Date'

Worldwide sales inclusive of future sales were note calculated.

Really surprised this has fallen back to 473p ask, some 10% below the post trading update high. The current market cap is £217m, net cash £20m & 2023 forecast EBITDA £24.9m, so ignoring 2023 cash generation / any potentially accretive acquisitions, this is trading at an EV/EBITDA of <8x.

Accenture meanwhile trades at some 19x 2023 EBITDA
FTI Consulting trades at 15x

Super cheap & the market will realise this when results land on Monday IMO.

I think the market is worried about the amount of debt & the latest acquisition on 7th Feb added fuel to the fire. Mid caps that have expanded via expensive debt financing have been taken to the cleaners (Marlowe, Strix to name but two).

Slight bounce since the open on low volume, I'm remaining wary as there are so many moving parts here & the CEO wants to bat it off as 'markets', where did Amati & Franklin buy their shares from? Why haven't TR1's been released for them? What does Burtis propose to do with his 14m shareholding?

I'd also have thought that the employee benefits trust buying 419k shares was material information that should be RNS'd at the time of purchase?

As for the results, capitalised development spend is off the charts at $35m vs just $15m prior year & cumulative carried software development intangibles sit at $49m vs their amortisation policy of depreciating over 36 months... that means a potential average of ~$16.5m per annum will be depreciated over the next 3 years (vs just $9.2m over the last 2 years combined)... that is a huge headwind to gross margins.

Is this the overhang then? Burtis owns ~14m shares...

"After taking paternity leave in 2022, Luke Burtis, Chief Operating Officer (COO) and Board Member, has decided to resign from his board position and management role with immediate effect to spend more time with his family. Luke has been a valuable member of tinyBuild, and his contributions to strategy and operations in the early years have been invaluable. The Board of tinyBuild would like to express its gratitude to Luke for his contributions during his tenure and wishes him all the best in his future endeavours."

The share price here is easy to understand in my view. PI's try to value this looking at market cap alone which is nonsensical when they have £240m of gross debt. Net debt is ~£170m, add the market cap of £375m at 54p and the enterprise value is £545m or 79p a share. That puts this on a current adjusted PE of just under 10x... Plus anything with significant gross debt is going to struggle when SONIA + interest margins reach >6% as they are losing a significant chunk of current & future earnings...

@HH, I've long thought that the likes of NGR, Nigwitty, Gigawitt etc felt like they were company insiders. Certainly anyone coming out against today's developments should be viewed with suspicion given what has happened YTD.

Jounce have accepted the cash offer at a slightly higher price of $1.85. So no NASDAQ listing via that route & no cash war chest, but not necessarily a bad thing given they were merging with a company that had a lot of baggage. Presumably Redmile & Sofinova will prop them up with a subscription, but at what price?

Now that is an interesting and welcome development. This could get very messy indeed for the smug little sh*ts who thought they had taken PI’s for a free ride.