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apunter2: You are reading "consignment agreement" in the Prospectus as being a consignment agreement as per the IFRS 15 B77 para and whilst I can understand why you would think that (and your hmmmmm`s etc. quite naturally follow) this assumption of yours is not correct. This model is 100% not a consignment agreement as per B77 wherein title only passes at the point of an on-sale. Here it passes under the originating contract. That disposes of that line of inquiry hook line and sinker.
Moving on, the Prospectus is in parts littered with ambiguities such as the company being "let" the stock (this language would indicate a lease arrangement) or the company "re-purchasing" the inventory (why the " " marks I am unclear) which points the other way. These inconsistencies certainly do not help in aiding understanding of the model. And I also suspect English is not the first language of the author, which is not intended to be a criticism as their English is a darn sight better than my Italian.
Weather - it is not a regulator`s responsibility it is the auditors who will be GT.
KNK - yes, we know already that this is in IFRS 15. I know what AZ thinks. What I want to know is what GT thinks.
Savvy6 - the key point is about control. I dont need to repeat the excerpt from the standard. 2 accountants I have spoken to have expressed reservations (for the reasons I have already given). One of them, in quite strong terms. I do not express any view one way or the other.
I have sought clarity from a former BDO partner.
If anybody wishes, I am happy to pass to them the findings of his view. Please note however that although that view would be persuasive, it is not an authority for a proposition that AZ is wrong. He may think that he has found a loop hole I dont know. If he has, then it might be taken as read that the IFRS would seek to close it, I dont know.
If anyone is interested to read his opinion they can PM me at stever40@outlook.com and I will be happy to share if he is available of course - he might not be.
GLA
Hello Weathergeek
I am (on an ex gratia basis) expressing a view for a potential investor and undertaking due diligence and must confess to being a little reluctant to come on here because of the somewhat negative responses which inevitably follow - paid de-ramper etc or worse - get lost you muppet (you get the gist). Having said that some BBs I find very fruitful grounds in DD with very knowledgeable people so I take nothing for granted and make no judgments at all.
Yes I have tried to go through IR and even offered to sign an NDA but that did not lead anywhere with SYME citing IP concerns. Well, without seeing the actual contract terms and conditions I am working off the inevitable assumptions based on the published literature. There is a possibility that a former BDO auditor will give me his view (off the record on the IFRS de-recognition point) . If he does do that I will let this board know. I should point out I have no agenda here and hold no positions short or long.
GLA
Not sure B77 fits as that scenario is akin to a car manufacturer/dealership relationship. Not my understanding of this model . Also with consignment, legal title does not pass until the dealer makes an onward sale. Here, legal title does pass under the originating contract and although I have not read a template agreement (I did ask IR) I would imagine that the owner company sets up some form of discretionary trust arrangement with Supply Me as beneficial owner that allows Supply Me to take the benefit of the inventory as collateral/security for the issue of the bonds.
Also, I did not refer to para (A) in B66 as don`t think it fits as well as (B) does which appears more aligned... but even if you are right, the net result is the same, the lease is recognised on the balance sheet, it is not de-recognised from the balance sheet.
You don`t say why you think B66 does not apply. (But if it is because you think this is a consignment agreement, well it is very clear that it isn`t.)
Try Trading 212 for executing trades they make their money on the spreads but unlike some others (FreeTrade e.g.) I find their platform useful and easy to use and execution is quick and no transaction fees. Limited scope compared to HL et al but still they do have loads of other exchanges besides LSE.
TradingView has great charts and loads of standard functionality = all of it free. The amount of info available is beyond anything that a professional would have had access to not very long ago.
Prospectus (p. 38):
"the inventory asset, having been sold to the Stock Company, is no longer an asset of the customer and accordingly is no longer required to be treated as an asset on the customer’s balance sheet (“asset derecognition” pursuant to IFRS) [sic]. Supply@ME’s inventory monetisation service is therefore not debt financing and does not increase the customer’s leverage levels. This is an important benefit compared to traditional asset-backed supply chain finance; the customer digitally “re-purchases” the inventory when it is required for onwards selling to its end-customer. THE CUSTOMER IS ENTITLED TO "RE-PURCHASE" THE INVENTORY AS THE STOCK COMPANY WILL HAVE ENTERED INTO A CONSIGNMENT AGREEMENT WITH THE CUSTOMER UNDER WHICH THE STOCK COMPANY WILL HAVE AGREED NOT TO HAVE DISPOSED OF THE INVENTORY.
[My emphasis caps not in original]
see IFRS 15 (extracted below to the extent relevant):
B64 A repurchase agreement is a contract in which an entity sells an asset and also promises or has the option (either in the same contract or in another contract) to repurchase the asset. ...
B65 Repurchase agreements generally come in three forms:
[...]
(b) an entity’s right to repurchase the asset (a call option);
B66 If an entity has [...] a right to repurchase the asset (a call option), a customer does not obtain control of the asset because the customer is limited in its ability to direct the use of, and obtain substantially all of the remaining benefits from, the asset even though the customer may have physical possession of the asset. Consequently, the entity shall account for the contract as
[...]
(b) a financing arrangement in accordance with paragraph B68 if the entity can or must repurchase the asset for an amount that is equal to or more than the original selling price of the asset.
Account for the contract as a finance arrangement which is neither off balance sheet nor derecognition. I will be interested to see how the auditors, GT, get around these words in the standard which look clear enough.
Pure asset play.
Need info soon. This is no longer under the radar. Something (anything) has to happen soon...!
Thoughts...?
https://www.tradingview.com/x/nC4svPMv/
Fragile.... Dropped 24% in 2-days (18-20 Aug). Needs a blue day tomorrow.
Sell signal triggered: keeping it simple, the green line hits overbought and falls beneath the red line.
Buy in when green line falls to and hits the 20% (more conservative will wait until green rises above red for confirmation)
https://www.tradingview.com/x/EFCqrVZl/
If...If...
If ifs and ands were pots and pans there would be no need for tinkers hands
34p ??
16p for me (ish) assumes a fall to 20 and discount of 20%.
Adding the £400m to a cash account to support the B/S does not of itself equal a commensurate increase in MC which is simply calculated as X * Y with X being SP and Y being number of shares outstanding. As others has said without a massive increase in earnings the massive dilution inevitably means a massive EPS hit. That obviously has a negative effect on would-be buyers and we are into a downward spiral. see Norwegian Air Shuttle for a similar scenario with a debt to equity raise and the impact on the SP in the last 4 months since April (down about 70%) and it was in trouble anyway.
https://www.tradingview.com/x/Zi0ey0Zz/
This is ready to turn with stochastics and inverted hammer candle both offering confirmation. But to make 2% it has to move 33%.
As of close today HL has this : Bid (buy) 2.3p Ask (sell) 1.81p. To make 2% after costs of £28.90 bid has to move to 3.07
CAP £1,000.00 Sell:
Buy 0.0230 0.0181 127%
VOLUME 43,478 shares
COSTS:-
BUY £11.95
STAMP £5.00
SELL £11.95
TOTAL COSTS £28.90
TOTAL INVESTMENT £1,028.90
TARGET RETURN 2.00%
£20.58
TOTAL RETURN £1,049.48 Buy
TARGET Sell 0.0241 0.0307 127%
Obviously the larger the investment, the gap closes. It`s why day traders use margin. Mugs game imho. YouTuber "experts" mining the miners....just like the Klondike!
GLA
"The international brokerage Sanford C. Bernstein on Tuesday cut its target price for the company's shares to zero.
`Norwegian is at the end of the line,` the brokerage's analyst Daniel Roeska wrote in a note to clients announcing the decision.`Rounded to the nearest Krone, existing shares are all but worthless.`
Fast-forward 4-months to the day and yesterday 13th August, SP closed at NOK 1.32 a drop of 71%. That`s a smidge over 11 pence.
With debt-holders resorting to equity stakes, how many shares outstanding now I wonder...? and what is the % left for people like you and me? Only crumbs left in share capital.
This is not going to bounce. This is dead for the long term and will walk all the down to 0.[something] GBX (pence).
I hope I am wrong and will keep it on my watch list for signs of a pulse.
IMHO never overly keen when 1 person holds both the Chair and CEO role, even temporarily.
Absolutely. Governance-wise, that is ridiculous.
I wonder how Mr Ward felt upon hearing THAT news...?!
It is interesting to see the history with this stock. Reminds me of two people falling in love. They cannot wait to tell everyone about their sure thing until....(well, we all know the rest).
How to regain the 2017 highs that is the question. Peter Lynch would say: "increase earnings".
That`s all right then!
Bit of a bolt from the blue?? Was he part time? seem to recall his reported salary at c 50K which is nonsense for a CEO of any company let alone this one.
Thoughts...?
https://www.tradingview.com/x/9LaKONZT/
This stock is trading at historical lows. Mr G talks about a recovery plan and RBL response - they dont need one.
Make your own minds up - what does that down trend tell you? It seems to have had negative sentiment for at least 6 years by that chart, I`m missing something.
Why have they been hit so hard?