Member Info for steph

See RNS’s

Looks like a 9% dilution to achieve a 50m fundraise and we gain the fast growing forward partner VC portfolio. Black rock doubling down which is good to see.

No idea how this might affect sp on open. We will get the opportunity pick up some shares at 270p so that might act as a drag until those clear later next month.

Black rock buying in volume at 2.70 means we are not dipping back to 2.00 any time soon.

“Molten’s portfolio companies raised £467m of capital (vs £2bn in the 12 months to end-September 2022), with 85% of the funding rounds being flat or up rounds. It is also worth noting that 97% of Molten’s investments are structured via preference shares and therefore include downside protections such as liquidation preferences (c 55% of its portfolio by fair value at end-March 2023 was valued at levels triggering the preference stack protection).

Over 80% of Molten’s core portfolio (representing 61.5% of it gross portfolio value at end-March 2023) has a cash runway of more than 12 months (in line with previous comments from Molten’s management), and over 50% of the core portfolio had a cash runway of more than 24 months. Therefore, Molten’s management reaffirmed its expectations in terms of funding requirement across its portfolio of c £20m in FY24.”

Maybe that is why we went up Friday. Yes the in house broker and if one has the tendency to trust GROW management than nothing they say or do will move the needle.

Anyhow for me the first solid statement that says the decline in NAV/share is ending. That in time will have a massive impact on our SP. The extreme discount is based on principally:

1) fear NAV/share will keep falling as was not discounted aggressively enough at the start of the dip. Basically a drip drip of bad news catch up.

2) lack of funding rounds post crash that in turn give a solid price discovery. High percentage of portfolio now estimated NAV valuations and in this jittery market the market sentiment err on the low side without solid price data.

For my money I think the discount to NAV is nonsense and confidence in NAV/share estimates will return. This will be greatly accelerated by some more price discovery on future funding rounds.

Noted the value of Graphcore has gone down again on our books. Lot of bad news baked in to Graphcore and can surprise on the upside for sure. Hot sector and big money sloshing about. Just having IP and a AI team together in one place has a certain value at the moment even if the product itself is struggling for commercial success. If product starts to sell in volume sky is the limit.

“Likethe rest of the sector, Molten Ventures must prove in the bad times that it is more than a speculative play on future technology. Broker Numis forecasts an NAV of 780p for the end of the year, implying an even greater discount than at current levels. A very speculative buy.”

Thanks alas

Last IC View: Hold, 279p, 19 Jun 2023

Silly to try but here goes.

1) phase 1 choppy drift up to circa 2/3rds current nav/share over then next 5 months as background market improves and dribble of good news on individual portfolio companies achieving funding rounds at levels better than on our books. Confidence in our nav calculations grows.

2) Year end results show a much improved situation with many core companies having achieved funding at levels that equal or exceed our current assaumpotns adding up to the first NAV/share gain since 2022. Choppy drift up to 80% of new slightly improved NAV/shave of circa 8.50 or around 6.80.

3) half yearly results for 2024 out in November 2024 and market substantially improving including exits and IPO’s coming back. Bank interest rates starting to drop fast as inflation nears 2% (wages sticky so headline inflation not dropping as much as factory gate or commodity inflation) with money supply contracting fast risking deflation. NAv/share back to 10.5 quid and sp 80% of that.

4) Year end results 2024/25 May 2025 with market fully stabilized and Nav/share 13.00 with sp 100% of NAV/share.

5) onwards and upwards from there at a rate of circa 20% per annum for NAV/share improvement. Slightly more for SP as we start to get ahead of NAV/share as we have in the past by up to 30%.

See page 9 of pitchbook. Nothing unusual going on. Nothing like justification for our discount to NAV/share.

2013 = 25% downrounds

2014 =25%

2015= 19

2016=19

2017=19

2018=17

2019=18

2020=21

2021=17%

2022=15%

2023=21%

Https://files.pitchbook.com/website/files/pdf/Q3_2023_European_VC_Valuations_Report.pdf

I maintain that this should not be below 2/3rds nav share or around 480. No idea what will happen on open in a few minutes but whatever that is we will likely drift up over the next few weeks/months. Big funds may start to pivot back and our tiny % of recent retail investors will sell into a rising market making a sustainable SP recovery choppy.

That assumes decline in NAV/share has bottomed out and we will see stability and recovery going forward. Recovery will see a sharp rise in NAV/share as portfolio has been growing and no unusual % of failure present. Interesting chart on % of portfolio post 2016 that earned no money (went under) and earned less than we paid for .

No surprises in update. Not much guidance on future either beyond “market stabilizing” .

I liked that multiples of sales in NAV calculations down to 7.4 from 8.4. They credited the higher weighting of larger companies for that which I don’t really understand. I thought the smaller the unlisted company the lower the multiple as they are further away from net profit.

Good gross margins on sales at 68%. Healthy Good running costs of Molton about equal to revenue (excluding realizations) so can go on forever.

Noted have started using revolving credit facility to invest post close. I take that as a good sign.

Https://www.telegraph.co.uk/business/2023/11/18/deflation-big-threat-interest-rate-cuts-sight/

Https://www.bloomberg.com/news/articles/2023-11-19/asian-stocks-set-for-mixed-open-as-us-rally-stalls-markets-wrap

Your drivel good.

For those of us with a lot of skin in nevrve racking 2 year “mega dip” to levels never seen since our flotation in 2016. I’d understand a retrace to pre covid levels but not to these. Back ground market for unlisted UK/EU tech has not changed substantially for the worse. The multiples of sales used on average valuations not out of line with levels that existed pre covid. Our own portfolio not in any particular trouble compared to the natural failure rate and churn pre covid.

I’m all in but nervous I’m missing something.

With me luck I think these are going to fly, particularly over the next 6 months, for all the reasons I’ve posted. I’ve been adding. Anything below 3 is an astounding bargain. Yes volatility (which I don’t try to play) and stocks don’t go strait up. Always small retraces along the way. Maybe in our case large retraces along the way but up we are about to go never-the-less.

Disappointing short term reaction to what was a reassuring but not spectacular update.

Forward guidance saying NAV/share will start to increase is what is missing. Endless minor losses justify our discount to NAV. Of course do not need valuation market to improve to get large year on year NAV/share increase. We can grow our way to NAV increases in proportion to sales increases with flat multiples of sales to valuations. Just need a background market not changing for the worse.

No sign background market deteriorating. I’t had a dip for sure but I feel our NAV/share has taken it into account fully. No justification for our extreme discount.

Https://pitchbook.com/news/articles/vc-valuations-q3-2023-stabilizing-prices

I’m now 15% above my previous peak holding. Hoping to in the end profit from this awful dip. Expecting will take 2 years to recover previous peak but that is a long way up from where we are an no investment can match that potential at this risk level.

Would have been nice to have sold at 11.8 and rebought at 2.06 but hindsight always 20:20.

Love the share and sector. Hate the volatility. I’m a long term holder so the ups and downs just unnecessary stress -not an opportunity.

Good luck all. For me I’m topping up as fast as money trickles in to do so.

Very light volume for s news day only 400,000 against an average of 600,000

generally volume our friend. so we drifted down on light retail profit taking after a run up from 2.01 to 2.69

us tech way up today so we are out of tune.

Thanks agri, made my day, also made me smile

50% of core