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I find it amazing that anyone would be selling at only a couple of % higher than yesterday based on this mornings RNS... 5.4% copper + 3g/t gold over 33metres?! That's huge. And multiple holes hit >2% copper too.

It looks to me as if they are heading for a much more even split between gold & copper output and resulting revenue as their current mines are low grade copper. Once the market sees the revenue coming in then this will be far above current levels & also be sporting a much bigger dividend IMO.

Agree on cash burn, I don't understand what the strategy is here at present. If they want to get the share price as low as possible then running down the cash balance whilst emphasising the monthly burn and showing no sign of how they plan to raise capital is a very good strategy.

If I was the CFO I would be very uncomfortable with a monthly cash burn of €400k and a year end cash balance of €2.2m, for all intents and purposes they have a max 4 month runway, whichever way you look at it, it's a crazy way to manage a listed company.

Post metaverse launch I fully expected them to raise ~£5m to continue their growth, I expected this to come from existing shareholders like HTC who backed them strongly when their plans were just conceptual. Now it smells to me as though they are deliberately lowering the share price & I wouldn't be in the least bit surprised if they delist the shares. Volume traded is negligible & based on peers it would be easier to raise money as a private company, this would also avoid a highly dilutive equity raise down here.

79k shares sold at 4p and PEEL have moved their bid - offer spread to 2.5-4.5, I can't see anyone buying without financing so this could continue lower and lower. Truly dire.

I’ve never seen a company reiterate a profit warning 10 days apart using exactly the same text… utterly bizarre.

The interest income could easily end up being a lot higher than the Liberum forecast of £24m too. They made £9m in the last 4 months of 2022 with rates that were likely a max;

September; 1.75% (BoE didn't increase to 2.25% until 22nd September)
October 2.25%
November 2.25%
December 3%

That's an average of 2.31%, in reality they won't be getting full base rate, so maybe assume 2% which worked out at £2.25m per month to ALPH. So each 1% is worth ~£1.1m.

As rates are now 3.5% and expected to increase further at the next meeting on 3rd Feb I think we can safely assume that average rates for 2023 will be over 3%. At 3% on the same level of swept client balances ALPH would be earning £3.3m a month / £40m PA.

It's a game changer for a £760m market cap in the early stages of internationalising, especially when new operations are almost instantly profitable.

Interesting movements here this morning, falling nearly 10% from the open for no apparent reason.

I note that EV / 2023 forecast EBITDA is now down to around 13 which compares to EQLS & AGFX who sit at ~9. At the other end of the spectrum (and IMO more relevant to ALPH) is WISE, which trades at ~27x 2023 EBITDA, some of which is client interest income.

Is ALPH finally at a level where it could be considered good value? The rating has certainly compressed a lot in the last 18-24 months and with offices in Milan, Luxembourg, Australia & Spain set to scale / open, it's surely going to continue, especially with around £30m in interest income in FY23 which can be used as growth capital...

Cheers Barcap, we've been the only two posting sense on here for the last 12 months. I'd agree that this company is all that is wrong with investing today. I've just re-read last weeks RNS again and still can't believe how misleading the presentation of financial information is, it would be funny if it didn't lead to naïve investors buying shares because they see '90%' growth in bookings and assume it's organic. To also slash EBITDA forecasts by 30% and not have the decency to admit it in the trading update is beyond belief. 100% smoke & mirrors.

My guess is that they'll struggle going forwards because OpenFive is low margin & 'Banian Labs' will consume any cash generated by the original AWE business. By this time next year their YoY comps will be flat and they'll either have to make another acquisition like OpenFive to obfuscate this fact or remove some prior year figures to create 'growth', like they did when removing Verisilicon orders last year despite using them in 2021 to boast about how fast they were growing...

Even the die hard believers seem to have given up now...

"Guidance:

The Group expects full year 2022 LSRT revenue to be in the range of £145 million to £160 million and full year 2023 LSRT revenue to be in the range of £190 million to £220 million."

The actual was £147m, so low end of expectations, that means they now need to grow underlying LSRT by 29% in 2023 to hit the previous low end of expectations.

Basically the market is sniffing a growth warning for 2023.

So yes, there are buyers, but the selling is currently far outweighing them, so the price keeps getting lower and lower. It'll continue falling until the selling slows or buyers decide that the price is too low. I'd guess LOAM sold another 1.5m today.

"When LOAM sells there is a buyer. Otherwise there is no trade. Shares are not floating in a vacuum waiting for a buyer. Guys seriously? LOL"

There is a SETS order book, buys on one side, sells on the other. When LOAM sell via their AT trading program they match against buys on the order book. E.g. just now there were two buys on the order book, 50k at 34.7 and 46969 at 34.5, both were just taken out by AT sells (presumably from LOAM), the share price now sits at 34.3-34.5p.

Flip it round and buyers would take out sells on the order book...

That's how it works with a SETS stock buddy.

"But who is the buyer?"

Hawi. The share price is currently 34.75p, last Monday it closed at 42.75p. That tells you that significantly more shares have been sold than bought. PI's are bottom fishing to a certain extent, but the direction of travel has been relentlessly down. Bottom line; LOAM are selling more shares than the market wants, even at 34-35p.

Really intrigued as to what happens next here, I've never seen a share price walked down for such a long period of time. Any buying results in a slowly declining ask price and any selling at all causes an instant drop (see 5k at 21p just now). This tells me that the market makers don't want to hold any stock at all.

I expect the company to put all stakeholders before shareholders, so it honestly wouldn't surprise me to see a 5-10p placing price if they want £20m, that's certainly what the market maker movements are suggesting.

No problem Monty888, glad it was helpful.

They had $451m net cash at 30/06. Deduct $210m for Open Five and a further $240m for Banian and then add back cash generation from Operations in H2 of ~ $35m (H1 was $32m) and you get net cash of $36m.

So enterprise value is around $900m at £1.10.

They are therefore trading at 10.3x EV / adjusted EBITDA, this compares to an average in the semiconductor industry of ~13x. So they are valued at a discount, but nothing outrageous.

Given Banian & OpenFive are essentially black boxes (there is no way of knowing whether what they paid is anything close to fair / good value), I don't think the current valuation is attractive at all & I certainly don't see justification for it trading at £1.50 (14x EV - adj. EBITDA) in the near term given the recent large downgrade + big acquisitions.

How cheap can it get? AOSL is quoted on NASDAQ and currently trades at around 5x EBITDA, it's profitable and has a much stronger balance sheet, so I'd say that AWE could easily reach those levels. That would be a share price of 51p.

So near term, downside outweighs upside IMO.

Hmm, the share price is now in dangerous territory from a technical point of view. At 35.8p it is sitting bang on the bottom of the uptrend that has been in place since Jan 2021. A break below here and next obvious support is 30.5p. Will buyers step on or do LOAM keep driving it lower?

@PYUECK, the RSI is currently 19, any measure below 30 indicates a shares is technically oversold. Looking at the long term chart, the last time the RSI was this low was back in September 2016. So yes, it's definitely oversold on technicals.

Is it fundamentally oversold? I'd say it's hard to see much downside from the current enterprise value of ~£135m, given that this is a company that typically produces lumpy operating results dependant on game release timing. I also suspect / hope that the new CEO has 'kitchen sinked' the trading update to reset market expectations completely, meaning future updates will be ahead of what was promised last week.

Time will tell, but with cash of £42m and positive operating cashflow I can't see FDEV going much lower than this...

From their latest annual accounts;

"In FY22 we experienced greater customer concentration with the revenue contribution from our largest client increasing to 78% of sales as a consequence of their international expansion being ahead of their US competitors (FY21: 72%). The second largest customer accounted for 6%, up from 4% last year. These two contracts are expected to continue long-term due to the close relationship and technology integration achieved by ZOO."

As per the capital markets day presentation shared below, Zoo estimated their FY22 market share was ~4%, a market that they estimate is worth ~$1.6b ($70m turnover). This is derived from 9 studios, as per P76 of the CMD presentation, of which Netflix is the largest at $500m.

It seems obvious that 78% of Zoo's FY22 revenue came from Netflix, a total of ~$55m, so we can work out their share of Netflix spend was 11%. We can also work out that their share of the rest of market spend is ~1.5%. I suspect the 6% customer is Disney.

The key questions going forwards are;

- Is Zoo's 11% share of Netflix spend sustainable?
- Can they grow their share of non Netflix spend to anywhere close to 11%?

I think we have to assume their 'long term' revenue target of $400m relates to FY2030, as this is the timeframe given on the previous slide, showing their TAM growing to ~$2.8b by this point. 400/2800 = 14.2%. Not sure why they don't just quote this on slide 77 though...

Of note is that Netflix spend (Studio A), isn't forecast to grow at all between now and FY2030. So their future growth to a 14% industry market share appears to be dependent on generating $345m of revenue ($400m target - $55m netflix), from non Netflix market growth of $1.2b ($1.6b today, growing to $2.8b via internationalisation). That would mean taking 345/1200 = 28.8% of the incremental spend between now and 2030.

To me that looks highly ambitious...

Interested to hear existing shareholder thoughts on the above. On a PE of 25x this looks to have priced in a lot of future growth, if they struggle to gain success with non Netflix customers then I'm not sure how they can attain their near term targets.

On the flipside, if they can replicate their success with Netflix then this is actually very cheap!

1st September guidance;

“As previously communicated, the transaction will be immediately EPS accretive to Alphawave. Forecast FY 2023 revenue for the combined group is anticipated to reach between US$325m to US$360m with a path to a yearly revenue run rate of over US$500m in 2024. 2023 adjusted EBITDA margins for the group are expected to be between 32-36% with 2025 adjusted EBITDA margins between 40-45% as revenues exceed US$500m.”

Today;

“Alphawave expects 2023 revenue of US$340m to US$360m and adjusted EBITDA of approximately US$87m at the mid-point of the revenue guidance range.”

$87 EBITDA / $350m revenue midpoint = adjusted EBITDA margin of 24.8%, which is 9.1% below the midpoint of the 32-36% range quoted 4 months ago.

Can’t wait to hear the excuses from the usual suspects in this BB.

Trading down because there has been a big shift down in 2023 EBITDA forecast - from $116m to $87m, not that you would know based on the RNS…

Only impressive if you don’t realise / know that the numbers are now a combination of OpenFive + Alphawave. They are presented like organic growth when it’s anything but. Capital markets day should be interesting, I hope they get grilled on disclosure.

NT to buy anything at 9p, is gold over $1900 the trigger to break out of the 2 year downtrend...

They still have no CFO, until that changes or they report a return to profitability this will be going nowhere IMO...