Member Info for steph

I have read no news on nay core company that indicates a NAV decrease.

Aiven on the books for 83m and no reason this has gone backwards.

Thought machine on the books for 99., all good news.

Coachhub 92m and going well.

By my calcs the value of Graphcore floated by the recent telegraph article (based on a rumored sale) is significantly above what we have it on our books for and crystalis have written up the value of their holding on that basis. SO if anything Graphcore will not be a drag on our NAV/share at year end and may even be a modest help.

I suppose forward partner shareholders with first chance to cash out perhaps for a long time.

even if we have big buyers in the background they might hang back and let the do fall so they create jitters and thus a better price.

anyhow frustrating but fundamentals and time on our side. just cant say when sustainable sp lift starts

“The deal values Perkbox modestly above its Group holding value”

Any and all confirmations that our NAV calculations are accurate for the market should be most helpful. NO justification for a 2/3rds discount.

I’ve always posted that a 1/3rd discount to NAV/share (or about 5 quid) maybe sensible in this jittery market.

Even that “modest” discount should melt away quickly once the market shows solid signs of stabilization and the robust organic maturing of the portfolio can finally result in NAV/share upgrades. Once that process starts might be pretty quick.

Thanks for the personal history. 1/6 not bad in these things.

I think we have been oversold and at some point it will correct itself -perhaps suddenly. Just needs a few sales or funding rounds of a representative sample of core portfolio and confidence will return in the NAV/share calculations. I keep checking for Graphcore news on sale.

We seem to fall back every time we go up a bit above 2.50 Some seller I suppose adjusting portfolio.

Year end in 2 weeks and preliminary year end results in about 6 weeks.

Will make a massive difference to our SP if our NAV/share stops falling. Due to the diluting effect of the 50m money injection at 2.75 and not at 7.73 (nav/share) we need an extra 32 million net “profit” to have a flat Nav/share result. Doable but uncertain. An announcement of a Graphcore sale before year end would probably be enough.

Wish we had more formal price discovery funding rounds completed on core portfolio but when we do SP will jump as it is so far below NAV/share due to market skepticism NAV/share is credible. For my money i’m with grow management on this.

I’ve been toppling up a bit and will of course put 20,000 pounds into my ISA April 6th. No brainer for an ISA and 5 to 10 year perspective.

Stars aligning for a big SP push up but as always who knows when. I note all my small holdings in UK trust equivalents are also below 2020 buy in points (pre covid boost) so sector (and not just us) still badly hit.

I had always thought that tech market recovery would occur in parallel with our sector’s recovery but seems to be a lag. Also tech market boom limited to the 4 biggest firms. Smaller listed tech players not at record highs.

Anyhow I am a great believer of “trickle down” (not the Reaganite variety). Solidity in seed funds plus top end booming at record high means our pipeline in between will recover it’s mojo and at least achieve valuations and SP at 2019 levels plus organic growth of portfolio -which has been substantial in the 2019 to 2024 period.

Sang

Would not be the first tec company to IPO ahead of profitability. Maybe the sector so hot some investors would take a punt based on future potential.

They probably need a new version of their chip and solve some software support issues before a successful IPO. Thus as you say hard to avoid a funding round first to get them through at least the next 12 months. That’s circa 200m.

They are surviving long after they should have run out of money. So maybe a secret white knight (maybe loans from someone who is willing to convert them to shares) or really generous share options in lieu of salaries.

In any case staff and management think able to continue as a going concern. Hot sector. Some sort of plan must be in place.

Https://www.uktech.news/guest-posts/semiconductor-ip-graphcore-20240305

Yes 4 would be nice over the next 3 months.

Nobody saw the decline to 2 quid either -or at least with some accompanying analysis. SP overshot I think due to black box on valuations within a retail wrapper.

GROW say they know a lot more about the component companies than they are allowed to share with retail investors. In good or normal times that did not matter but I think has led to a natural overshoot in bad times when hard evidence is needed. Aggregating sales growth or runway lengths is not enough. Us retail investors need to go through the portfolio one by one to determine if NAV is solid or exaggerated. We don’t have the info needed to do that. Thus lack of confidence.

For my money I think our NAV/share is solid and will start to rise again. If we rise even a tiny bit at year end (in spite of a slight dilution needed to raise 50m cash at a 2.75 price or a dilution of approximately 30m) we will quickly soar. If we don’t have a nav increase until half yearly results in October then we will soar then. If not till year end 2025 we will soar then. Very dependent on our results. 3 half's reporting nav/share decreases is not confidence building . What if we have 3 more? When willl the nav/share decreases stop? All good questions that need answers before we fly again.

Once we fly 11 quid within 2.5 years not an unrealistic target. Great portfolio little damaged thus far by the nav reversals. There will be nav/share upgrades to 11 quid and with that our SP in stable market conditions

Https://aventis-advisors.com/software-valuation-multiples/

The absolute 2021 peak for software firms revenue multipliers was “only” twice the long term average. GROW valued very few of it’s portfolio at peak tending to manually suppress valuations gained by last round in that period. Our NAV never was calibrated at peak valuations. That is why credibly our NAV/share now is not massively discounted against year end 2022. It has come down with the market with maybe a bit of gas left in the tank. SP is an outlier not our official NAV/share. SP can be erratic and emotion driven especially for a black box retail wrapper around illiquid assets.

I think this will fly but can’t say when. maybe days, weeks or months away but not years away. Sometime this year we will correct and get to 2/3rds NAV/share which is a fair discount for this uncertain market. 2/3rds discount to NAV/share silly.

2023 was below long term averages but not massively so.

Thanks for your analysis.

For my money I think this trust will sharply correct to an SP to roughly it’s 2021 peak and then go up steadily but not spectacularly from there. Organic sales growth of portfolio, organic advancement to net profitability of some and a maturing of the seed component mean it will grow into the mid 2021 valuations and more even if the valuation multiples remain 50% or more below 2021 levels.

AI is interesting. Been many false starts for 3 decades on IT resulting in real cost savings for office jobs that never really happened. Existing jobs just done with some limited IT support. We now type our memos in our own computers and not through a typing pool. We send a lot more mail than we used to do rather than the same amount more efficiently. We continue to have live meetings. We can research faster but have used that to research more rather than the same amount more efficiently. Impact on productivity has been as a result marginal.

Maybe this time IT (powered by AI) will really have a big impact on office work productivity per worker. If so trillions to be made by the industry leaders. global gdp 85 trillion us dollars and a significant percentage of that is the type of jobs that might respond to AI displacement. Too bad Graphcore did not scale up fast enough to get on that train. I still expect it will get a few crumbs for it’s IP and team (equal to a decent profitable exit for GROW) which have held together remarkably well.

We are still below our IPO price of 3.00 on June 16 2016.

8 years on, no dividends and less than our IPO. Gigantic destruction of value.

It’s not as if we made any big mistakes. Portfolio much bigger and more valuable than in 2016. Few bankruptcies within our core portfolio. Companies in core portfolio growing sales at a rapid pace. Some such as Revolut have broken even and thus have infinite runways.

This SP nightmare will surely end soon.

Chrysalis, the London-listed investment fund that has a stake in Graphcore, said in December that an unnamed company in its portfolio was in the process of being sold. Weeks later it more than doubled the valuation of its Graphcore stake, which analysts at Zeus Capital said was possibly related to a sale of the company. One investor has calculated that this put a $528m valuation on Graphcore.

The investment manager Baillie Gifford also more than doubled the valuation of its stake in Graphcore in recent weeks.

Both investors had previously significantly written down their investments in Graphcore as the company struggled to gain a foothold in the market for AI chips despite huge spending on artificial intelligence. It has also been hit by the closure of its business in China amid US controls on selling AI technology.

I just wish markets stay high long enough for us to recover our mojo. Seed never declined in valuations and post IPO profitable tech never been more in favor. Inbetween we are still screwed yet our portfolio has consistently been growing sales since the SP decline set in 2.5 years ago and by big 50% pa. Also not a single core portfolio company has gone bust. Even Graphcore, written of by some, probably has the NAV or more we have on our books.

Lets have a more realistic SP aligned with our quite conservative NAV/share. From there lets have some NAV/share upgrades as the market for unlisted tech improves.

I expect within 3 years if not sooner we will exceed our high last reached 2.5 years ago. From there steady 15% pa or more growth so long as the general market does not crash (big if).

This has been a much mor volitive investment than I ever thought it would be but long cycle lots of repressed value. 10 years form now we will be a very different SP and I will as a result be a rich pensioner by then.

https://www.economist.com/finance-and-economics/2024/02/25/stockmarkets-are-booming-but-the-good-times-are-unlikely-to-last

Sent from Yahoo Mail for iPad

The Group has acquired approximately 19% of the Fund for €8.5m. This 2016 vintage fund contains a portfolio of high-growth, disruptive technology companies, with over 80% of the value concentrated in six mature, proven assets in attractive market segments: Revolut, Pleo, Grover, WeFox, Thriva and Curve.

What a boost for investor confidence in the rest of our core portfolio. Graphcore was the most vulnerable to a write down.

HOpe any announcement is before march 31 so it can be included in NAV calculations for year end. NO detail on what 500m us dollars bid means. Is that for 100% of graphcore or just a large and/or controlling stake. With 3 parties potentially interested maybe final will be greater than the rumor.

Https://businesscloud.co.uk/news/will-graphcore-be-sold-to-cover-heavy-losses/

“Investment manager Baillie Gifford has more than doubled the valuation of its stake in Graphcore in recent months, as has London-listed investment fund Chrysalis, leading to speculation of a sale.“

Https://technewsspace.com/british-ai-chip-developer-graphcore-will-try-to-find-support-from-foreign-investors/