The latest Investing Matters Podcast episode with London Stock Exchange Group's Chris Mayo has just been released. Listen here.
Amur I absolutely agree with you that within 5 years SEE could be valued at 2bn $ or £ - if we can stay independent and win our more than share of the RFQs the numbers will deliver the SP and that value could be substantially higher but what does this mean?- ‘If there was something decent on the table now I would take it and I hope the bod would also.’ Why wouldn’t you want PMG to do what he stated before his interview and maximise the value of the company for all of us? - why give SEE away for X now when it will be worth at least 5X in 5 years?
Glandore my apologies I typed in 2.155 rather than 4.155.
Thoughts are exactly the same though - nobody in the short term is bidding 40-45p when the SP is 7.5p
Amur is incorrect however because as Paul says the OEMs are only just getting their heads around DMS and what the requirements are - that’s why Magna is such a great deal for both them and us as it gives OEMs a quick solution to complying with the new legislation. We DO absolutely need RNSs because our pipeline is not transparent band tge 6 on the table hopefully by year end demonstrates that. The townhall meeting and yesterdays podcast has really crystallised a lot for me and clearly helped articulate why it’s taken 22 years to get where we are . I’ll hold my hands up as an impatient long term investor but it’s all falling into place for me and I’m convinced it’s coming. Let’s stop talking of bids and win 50% + of everything on the table!!
Wishful thinking I’m afraid - not an expert in M& A but if you were to Google the type of premiums bid targets have historically achieved over their recent share price the answer is something like 50%. So nobody but nobody is currently therefore likely to put a bid in for 93p which is £2bn or even 80p which is $2bn when the SP is 7.5p. No we really don’t want a bid we want RNSs and quarterly updates indicating a growing order book and sales!!
Amur- you heard PMG himself acknowledge on the podcast that even the OEMs haven’t got a clue yet what this is worth. Personally I don’t want any bids - i want to see us remain independent line Paul’s says for another 4-5 years when finally we will receive top value for our shares - and forget those Aussie rich folk - I want those US based companies to be falling over us or indeed anyone else who has $15bn to spare!!
We all know we are substantially undervalued but for perspective the reason 7Digital can react the way it did is because it only has 27.5m shares and is still only capitalised at £11m - wholly different with our 2.15bn shares and I’m not sure any amount of RNSs will shift the price other than acknowledging and reporting a substantial growth in revenues. As we heard on the podcast it’s coming but the market doesn’t seem prepared to acknowledge it until they see the £££ signs
I genuinely feel that positioning themselves to outbid the competition was not top of mind when Magna joined forces with SEE for this deal. It’s an absolute no brainer for both parties when you listen to last weeks Townhall presentation and given the technological lead both companies have on the competition and the looming deadline for compliance with the new safety rules they have to be first port of call for all those OEMs who have left it too late. All the likely eventual bidders have extremely deep pockets so I don’t think one will have any advantage over the other other than how high they will be prepared to raise that eventualprice but again when listening to Paul I honestly feel he’s going to be pushing this for the long-term and driving shareholder value up organically rather than resorting to a sale and any undervalued bids.
Slow going but bit by bit the SP is tracking up no doubt supported by our great emerging story and constant demand to mop up shares as they get sold. Hopefully before long we can get a few RNSs out that will catapult us to the next level. Would be nice to end the week with a 7 !!
PMG was just brilliant and as others have commented has a great handle on the technical aspects of the business that gave me a lot of confidence he has the best interests of the future and growing shareholder value as his priority - so when he referred to ‘opening the Kimono’ ( clearly an eastern hemisphere turn of phrase, was he referring to revealing the Toyota win or some of that low hanging fruit he wants to reveal ;-))
I think there are different strategic imperatives at play here. We’ve read a huge amount on here over the last few days from individuals who’ve had conversations with PMG in addition to posts by Colin Barden explaining why this deal was so important for Magna given time is running out for OEMs to place their bet with a DMS supplier who can deliver a cost effective and easy to install solution before legislation requires it. The airline industry is at a different stage of development and doesn’t have the same time driven requirements. Not saying it may not come but certainly not as urgent.
Seize - The answer to your question is no as if for some disastrous reason the shares stay at this level or drop just before they convert they will technically be out of pocket. Essentially for exclusivity and in the hope that the value will substantially rise they have agreed to fix the price at 11p which seems at the moment like a great deal all round.
The reason why they wouldn’t of bought in the market is that that money does not go to the company in that case rather other shareholders. We will use the money for whatever purpose requires and therefore the money has to come directly to us by way of share issue.
I know a question many of us had before the meeting was what QCs $30bn pipeline might mean for SEE in terms of revenues over the next 4-5 years. Did anyone yesterday manage to get that one answered? Thanks
It’s a bit like the old school exams where everyone is waiting to come out of the hall to discuss the questions and the answers to see if Paul & Naomi got them right. Could they have added more substantiating evidence or did they fluff the answer and move on to the next question. And how many did they leave out??? Sounds like the results are not going to be available for some time and perhaps not fully until 23/24. I’m fully expecting the PI report to say ‘ could have done better and needs improvement ‘ !!
Well good luck to all those boys and girls who were able to make it to the Townhall this morning. Clearly a lot of apprehension in the market as all eyes and ears are on the SEE team. For those of us who were unable to make it any snippets as they scroll through their presentation and respond to your detailed and searching questions would be greatly appreciated !!
Yes excess cash could be wisely invested in an acquisition however given our profile is now very much one of IP development I’m guessing the target would have to be one that gives us an immediate advantage over developing those skills in-house. Our team are amazing and it may well be that there’s some complementary tech that we want but can’t currently afford to develop that we could incubate and leverage to grow future revenue streams. My guess would be however that in the short term any excess cash will be reinvested back into working capital given the slew of RFQs coming our way and need to staff them up.
This fairytale has also ‘distracted’ investors away from the real game in town - driver safety - perhaps at last as our own fortunes are on the up this myth will direct them to our story !
https://www.bloomberg.com/news/features/2022-10-06/even-after-100-billion-self-driving-cars-are-going-nowhere
Looks like SEEs 22-year apprenticeship is about to complete and Tim Edwards ‘lateral thinking’ challenge solved as the pieces of the jigsaw fall into place. Some very astute negotiating and manoeuvering by SEE here in extending their relationship with Magna which clearly derisks future funding needs, extends the company’s independence and virtually monopolises the rear view mirror for at least the next 3 years. With so many other things going on as well we should now start to hear more formal acknowledgement from the company that new business has been won and actually see it in the numbers. At what appears to be a very reasonable cost too we will end up with 4.5 billion shares in issue. Together with our new reporting finally being in US dollars ( and potentially a Nasdaq listing to put a rocket up the SP) it’s not hard to imagine us being at a minimum a $5 billion company. Isn’t that a great thought to take into the investor meeting tomorrow !!!!!!
Great list Major but just help me understand where you get the 33% of the company going for 11p - my eyes are glazing over from all todays posts but shouldn’t that % be about 7% - ie. the 349m possible additional shares as a % of our issued share capital 4.7bn. In total Magna will only represent 10% - thanks
Thanks Seeing - of note “ The long-term position is benefiting from it underplaying the strength of its position publicly as, in the auto industry, this will enable it to win a
larger market share for longer.”
Maybe the silence has been a Company choice rather than NDA driven which many of us believed to be the case.
Like this too “we see the stock as a 22-year-old proven-technology unicorn that its current share price belies.”
Another nod to Tim Edwards video and his “we will see what’s next ending comment”
Looks like the reveal is under way !