Member Info for steph

Now an RNS that says JP Morgan have now over 3%. Must have been building a stake.

Sang I don’t think GRWO management can say anything tongue in cheek at a formal investor meeting. I took it as sincere. Yes they raised a theoretical situation on cash availability that can’t be met without some form of successful IPO /buy out on one major core holding.

CEO and CFO yesterday at 3.026 and 3.028

At the investors on line meet they were openly saying that GROw as an institution should be buying it’s own shares at these prices and they will as an institution if some cash realizations give them headroom. I suppose these private purchases are putting their money where ther mouths are. Welcome news.

https://www.theguardian.com/technology/2023/mar/14/techscape-silicon-valley-bank-uk?CMP=Share_iOSApp_Other

Good on Uk finance ecosystem.

Market in general, tech private sector even more so and GROw even more volatile.

I don’t mind the volatility so much but can’t understand being much below 2/3rds NAV as median point. I think the NAV calculations are credible for the current market conditions and that we are strategically underpriced right now with this annoying volatility to boot. .

Interest rate expectations for a rise are diminishing due to SVB fiasco. That should help us. More than anything else the rising risk free return on capital was affecting our SP by removing, at least temporarily, the general willingness to fund long term investments such as developing unlisted tech companies of the future.

I expect as the market starts to expect a freeze in interest rate rises there will be a pivot back that might be quite abrupt.

Great article. If only we were still in the common market we would have a shot at growing even more but still promising for London. Finance ecosystem, skills pool and universities top tier. An office in old street or anywhere in city center has over 3.7m workers within a 60 minute public transport commute. Thats the perhaps best in the world in terms of skills accessibility for any given office. Tokyo lacks the ecosystem NY is grim for many commuters and silicon valley a complete nightmare for both journey to work as well as business to business inter-day travel.

The result thus far favours London. US start ups have not lost their money on deposit but they have lost any overdraft or loan facilities they had and will have to negotiate with a non specialist lender in a challenging market. London is left as it was or even improved as HSBC has deep pockets and a desire to grow their VC tech exposure.

I would imagine a buyer in the US will emerge but if not a substantial difference. Best shot was over the weekend.

I was thinking a bank run in us on a whole bunch of regional banks possible. Still is but the longer it does not happen the lower the risk. Peak risk was Monday when I gave it 10%. What will now happen is a slow bleed of customers away form regional banks to the bigger banks.

Silver lining is pressure on FEd not to raise rates.

Bland RNS but sometimes bland is good news.

For me a sale on the secondary market is closer to a mark to market price as all the estimates in the world -however detailed or worthy.

I get that there may be specific circumstance to an individual sale and the participants may have a broader relationship that might influence the recorded price up or down. Never-the-less assuming the buyer and seller are not stupid and want the best price for themselves it is very useful.

If there was a recent secondary sale for Revolut that implies a valuation of 15bn good enough for me.

Circa 15bn for Revolut was what i calculated GRWO had given it on the GROW books. So aligned with recent secondary market sale as it should be.

Time heals all share price wounds as information becomes available but how long?

Revolut

Yes wil be the test although they say they are in profit so no need for funding so no way ok knowing real market value until an IPO. Last week SVB UK would have had a value of at least 1.4bn according to HSBC. At some point the Revolut profit will rise enough to form a traditional P/E ratio so a real sector average value can be given.

Agreeing with all that and finding out the hard way a retail position in unlisted shares can be quite volatile. Morse so than a major tech index like Polar. IN the long run GROW’s business model should outperform Polar (at least in theory) but in the short and medium term we have done poorly due to the retrace from 11.82. Over 5 years with no SP growth at all. that does not seem right whatever the valuation bubble of 2021.

At some point this will pivot up and probably quite sharply. The underlying portfolio is undamaged and is growing fast. If we had several key portfolio companies declining in sales or going out of business fair enough but we don’t.

ALl that has dipped is the valuations of that performance. All our portfolio companies are beyond the good idea stage and into developing market share with real sales and with good margins on those sales. Generally not enough sales to be net profitable at a company level but the basics are there in all. None except CAZOO have slipped up and CAZOO was never really a tech firm with a unique product.

I don’t understand us being near 1/3rd nav and broker targets.

I suppose I’m a classical economist in the sense that either NAV and targets are factually wrong or there is an information failure. Happens all the time in markets . Most spectacular was South SeaBubble in 1720. Even Isaac newton lost a fortune in that. Smarts no immunization when proper information lacking.

I think us being coy about individual portfolio valuations and why on a disaggregated level is the problem. In good times did not matter but in bad times market assumes the worst.

Nothing for the share specific good news we dodged a bullet as we were exposed in 3 wasy to SVB uk.

1) our deposits lost or delayed
2) OUr revolving fund disrupted and partly lost.
3) our portfolio companies losing deposits perhaps an existential event for some.

When us tech is flat and gb group mildly down and ftse 250 down half that.

We had share specific good news against Friday. We are not a bank. I get not recovering the 14% Friday drop on a bad monday but why 6% down?

Thanks

Yes you maybe have it. A pivot to bonds to lock in these high rates as fed now more likely to freeze. That drains liquidity from stocks on what should have been a good news day.

Trustpilot says it had $36m held in SVB UK, of which $18m was “currently in transfer out of SVB UK but pending confirmation”.
It also had $19m cash on deposit with another bank, and $4.5m guaranteed by the US Federal Reserve following their announcement last night (that US SVB customers will get their money in full).

“The market has taken a full 1% off expectations for Fed Funds at the end of 2023. On Thursday it was 5.5%, now at 4.5%.”

Once we get past this volatility on spooked global bank sector maybe a silver lining in that this significantly pushes FED, BOE and ECB to halt interest rate rises.

Grwo down a bit after being up 6% on open.

market spooked and a reassuring RNS probably justified. Strange to go down below close on Friday with all the unresolved issues then.

Agreed.

Shows there is financial stability risks attached to raising rates too fast. A good argument for a pause to see if further rises actually needed as well as monitor potential for collateral damage.

No need anymore.

Still I find GrOW management not good “bad time” communicators. Clearly the market does not trust the NAV calculations no matter how many independent reviews are conducted behind closed doors.

GRWO resist divulging a bit more information about the individual firms that would reassure. yes some portfolio companies would not like it (confirmed estimated haircuts on valuations, sales per company, sales as a percentage of company valuation, margins, , etc) but so what. Why should we GROW shareholders suffer? Are GROW restricted to not divulge more or is it some weird club for insiders.