Member Info for TakingMyTime

Ok, I've not commented on this here previously, but I think it needs to be said.

The banks are not going to be surprised by Basel 3. For the most part, they've already repositioned. Anyone expecting a huge change this summer may be in for an unpleasant surprise.

I'm not saying there will be no impact but it isn't going to be immediate nor as significant as some people think.

I'm quite bullish on POG but not primarily because of Basel 3. That's a sideshow, largely.

@Bamps
"Fantastic news about the Decline starting.

But Whoa!
Take a deep breath and hold your horses."

You deramper, Bamps. ;)

"North America cosists of Canada and USA"
Mexico says hi. :)

@Davie, your suggestion might lead to him making himself look stupid in other ways, though. :)

"thats my rant over time for a cuppa"

A wee bit of advice for you. Have the cuppa first and skip the rant. If you do that, it may not make you actually any smarter, but you'll look smarter to everyone else. :)

Good luck!

If it wasn't at least reasonably friendly, the 9 million options that he just exercised would not have been exercised. Their vesting, I believe, was delayed (in July, check the RNS) to 5 July 2021. Those options were not vested and could not have been exercised unless it was negotiated (as part of his leaving) that they would vest before then.

So certainly it was a negotiated and reasonably friendly leaving. The fact that there was a transition period also reflects that.

I'd certainly agree with that, Spy. Though I really think it incredibly unlikely that he's going to NCM.

@jerry
"How can someone who owns millions of shares 'short' something? They arent shorting it, they are just selling it. If you were both short and long a million shares you would be neither. You would be square."

Actually, being pedantic, this can happen in a relatively illiquid market, though it would only typically be IIs that would do it, and usually only in fixed income funds. Basically, they have an asset that they want to hold long term, but in the short term, they need to reduce exposure. It may be because of portfolio balance requirements, or simply because they see a short term risk that they wish to mitigate.

So for a week or month or three months, they might short (in part or in whole) something they actually hold. With a liquid asset, you'd just sell and buy back, but if the asset is in short supply, that may not be practical.

It doesn't make sense to do that in Bully's scenario, for several reasons, including that the short is not without cost, and that to open a short position you'd have to disclose the material fact that you are about to be selling millions of shares. At which point the counterparty would say, "No thanks." And if you didn't disclose it the liability hit you'd face would be substantial. And, it would probably be criminal.

But you can, and sometimes institutions will, open a short on assets that you hold and intend to continue to hold.

/pedant

@Bully. An interest rate swap is a swap on, well, interest rates. Interest rate swaps are not used to hedge equity price risk. You use it to lock in an interest rate -- if rates go up or down, you will receive or pay money based on how much they move. But equity prices are not directly linked (and often not linked at all) to interest rate changes.

Perhaps you could provide some source describing the actions you think GH might have taken to lock in a SP. I'd find that interesting. Your descriptions of it aren't really adding up.

@Spy "until someone comes up with a genuine valid explanation why GH might have to drop stock,"
How about he had a huge percentage of his personal wealth invested in GGP and he wanted to diversify? Isn't that good enough?

Maybe with his wealth profile, having 40 million shares (£8 million) in one company is enough risk? Maybe he's selling further and taking it down to 20 million. Isn't £4 million in one company enough?

If I had that much money, I'd be putting some of it in stuff that would be completely safe no matter what happens.

If he sells out completely, then you'd think it is probably a conflict of interest situation. But partial divestment? Just portfolio rebalancing, in all likelihood. An entirely reasonable thing to do.

@Sliotar
"I HAVE ABSOLUTELY NO IDEA what they have been brought in for. None whatsoever. But the market seems to know. And until we know for sure, regardless of what the current situation we believe the company to be, the market is going to price in a dilution."

1. The market knows nothing. It's all speculation just like on this board.
2. Why do you think appointment of this broker points to an equity raising, when the previous broker appointments didn't? There was no equity raising after H&P and Berenberg were added.

Here's what Shaun Day said as to why the new broker was added:
" We look forward to working with Canaccord, developing relationships with their clients and attracting new institutional shareholders to Greatland."
Here's what Gervaise Heddle said about adding H&P and Berenberg:
" and we look forward to working with both firms to further strengthen our relationships with new and existing institutional shareholders."

Sounds the same to me, and it didn't trigger an equity raising back then.

3. Why would we need a new broker to do an equity raising, anyway? I'm pretty sure that H&P could handle that easily, and if they couldn't, it's locked on that Berenberg could.

4. Why do we need a raising, anyway? We've financed Hav expenses with NCM, NCM is paying for PRE drilling right now, and GH just exercised 27 million options which put another half a million in, and we had cash on hand anyway.

No personal attacks but you really need to answer those questions if you want us to take your talk of a raising seriously.

@Tymers "Holders come on! I noted GH selling in advance of any notice and forecast a figure of 50 million , it was thrown out by the ones now trying to explain it."

I think I'm doing some explaining, and I don't think I ever threw that out. It was always a distinct possibility, though back then it was mere speculation.

@dave "tmt...he would not have exercised so many options to pay tax"
I think you misread me. It is (IMO) almost certain that he sold at least some of those 27 million to pay the tax he incurred when he exercised the options. Under Aussie tax law the difference between 2p (what he paid for the options) and 20p (market price at the time he exercised) would be taxable, if I understand it correctly. That would mean he would likely sell somewhere between 25-40% of those shares, after exercise, just to pay that tax.

As stated, I think it is probable that he sold (or is selling) all 27 million of those option shares. I would, personally -- 40 million (£8 million+) is more than enough to hold in one asset. (I wouldn't be pumping whilst doing so, but that's another discussion.) But I'm virtually certain he has sold at least some of them for tax purposes.

Whether he has sold some of the 40 million is mere wild speculation.

@Davielad
It is known that Bloomberg reported GH as having 40 million shares as of 31 March. That was down 34.5 million on his previously reported holding. I have not had access to Bloomberg recently to see if they have an update. It is remotely possible that those shares have been transferred to some kind of family trust or something, but it is certain they are no longer held directly in his name, and it is highly likely they have been sold. The SP behaviour between his leaving GGP and 31 March would support the view that someone was selling.

It is also known (from RNS) that a "former director" has exercised 27 million share options. That is GH. So he has purchased an additional 27 million from the company (at very low option prices).

It is almost certain that he has sold some of those shares to raise the cash to pay the tax that would be due upon exercise of options. It is likely, in my view (but this is sheer speculation), that he will have sold all of them, and that 40 million is his intended holding going forward. It is a nice round figure and one that he would have known would be reported, and that the market would know he had sold. If he intended to hold more than 40 million for the long term, I do not think he would have sold down to 40 million. I suspect he has sold or is selling the remaining 27 million. If that is the case I suspect that his selling campaign has either ended or will end very soon. I personally think recent SP behaviour is consistent with continued selling by someone after 31 March, and GH seems like a likely candidate to me.

It is possible he is going to sell down lower than 40 million, but that would surprise me a little bit. He knows the case for GGP.

Much of this post is speculation. I hope it is clear where I am stating fact, where I am speculating, and the reasoning behind my speculation.

@jambo "we are in AIM so are traders at heart"

Not me, but then I was late to this share when it was hugely derisked for an AIM investment. Usually I avoid AIM.

@rebster, it gets tempting sometimes, doesn't it? But it's like pouring petrol on a fire to respond....

Can we please not go this route again, calling other people sheep, dick, etc.?

The case for or against investing in GGP is nothing to do with the character of other people who comment on here so if you write things about other people you are off-topic -- and adding nothing to what has, in the past, made this board really good and useful.

@strictly, we've discussed this before, have we not? In my view, you are significantly overrating book value as an investment metric, especially for housebuilders in a housing shortage.

I do agree that the capital return programme is not sustainable in the long run -- it was never said it would be. I also agree that dividend levels have an outsized / dangerous impact on investor sentiment. I certainly agree that there comes a time when the capital return will be winding down and that is on the nearer horizon, and the SP will reflect that.

I'm of the view that PSN has positioned themselves beautifully during the downturns and are continuing to reap the benefits of that. In my view, the only reason we aren't between 3500-4000 is negative sentiment due to bad publicity, and the bad publicity problem is being addressed and receding. There will definitely be a time for me to top slice, and a time for me to move entirely to other builders. You think that time is now. I don't.

I think the profitability is going to continue, the capital return still has some time to run, the feel-good factor of reversing publicity still has some payoff, and because of those factors the sentiment is likely to continue to be good on this share for another 20% rise in the SP, possibly more. For now, I'm staying put.

I'm less than 10% in housebuilders right now, FWIW.

@dave
No, as an NCM shareholder I'd be happy to see NCM buy GGP at 50p. I'd view that as a very good deal for NCM -- which means, I wouldn't feel I was getting best value for my GGP shares.

If NCM bought us out at 50p, this would have been a great investment for me. But, not as good as I think it will be if we just stay the course.

@Bully, it just depends on the price and how big the resource is. As an NCM shareholder, I'd be happy with any price at 50p or below, and wouldn't care how they paid for it, equity, cash, or combination of the two. (As a GGP shareholder I wouldn't be happy with that price!)

I took your post (the part I quoted) as suggesting that it would be rather difficult for them. They've got more than enough cash already at the current SP, though obviously countering that, they'd have to pay a premium and it would deplete their cash reserves considerably.

I also agree with you that this is unlikely. I don't think GGP is on the market and I don't think NCM is prowling with the intent of buying.

@Bully "FOR NCM - they have a finite amount of capital they can invest. I don’t think they have the funds to fully buy GGP so would need to borrow or dilute."
NCM had US$1.7 Bn cash/cash equivalents at 31 December. Obviously they'd want to keep some cash reserve, but they could easily borrow another half a billion, or use an equity raising if they preferred, for the purpose of buying a major asset.

Their actions to date strongly indicate, IMO, that they are not looking to buy out our share of Hav or to fully acquire GGP, but it wouldn't be particularly difficult for them to do so.