Member Info for Thunder2040

My main risk flag is the cruise element, if that recovers this will bag it is that simple, if cruising is terminally damaged, this is a basket case most probably. Most of the debt is linked to the vessels so that seems to be the big question mark for me, insurance however covers cash burn which means this will not go under. Insurance revenue is defensive and tilted towards a sector of market that is the most affluent. I use NCL and Carnival as proxy for cruise sentiment and they are not doing so bad. I would actually say this - I am not convinced a raise of this size was actually required. I think the fact the offer was not reported and then an ex insider was brought in at a discount to the offer price stinks - and that has put off a huge amount of people from investing. I think he will try and take full control at some point.

Titan travel was being touted around for £100m pre covid. For me the strategy to raise capital was on the basis that they can now ride out extended covid crisis and dispose of Titan at a higher price in future. Being taken out with the current situation would yield a rock bottom price, and if that is 30p that gives me significant confidence that this is worth probably in the region of x3 of x4 current value when things get back to normality. Older people want to enjoy life, I don't think this virus will put the off travel indefinitely, especially if they can be vaccinated.

The premium he paid for prt of it isnt that important tbh, it is more about the total price

I have calculated what I anticipated the ex raise TERP to be, can someone else check this and let me know if you agree:

Cap raise prices:

No.Shares Price £ Value
224,400,000 0.27 60,588,000
124,183,026 0.12 14,901,963
623,335,182 0.12 74,800,222

Total:
971,918,208 0.1546 150,290,185

Pre raise market cap: (No. Shares in issue 31 Jan 2020) x (SP on 28 Aug) = (1,122,003,328) x (0.1361) = £152,704,653

TERP = Total market cap / total shares = (£152,704,653 + £150,290,185) + (971,918,208 + 1,122,003,328) = £0.145

Post raise no. shares in issue 139,594,769 agrees to Friday RNS

Currently trading at 0.1052 which is a discount to TERP of 37.5%. So in the last 30 days what happened on a macro level to justify that post raise decline, I would say nothing. I would say with potential vaccine in the works and stimulus coming this is a strong buy and hold until the games are over.

Share consolidation at current SP would give new SP of £1.58.

Thanks

Correct, the nominal value is irrelevant for this consolidation. If share price is 10p at close on Monday it would be £1.50 on Tues open, all things being equal.

Looks like a pump and dump tbh. Patience and nerves of steel required I think.

Smorty is the debt no fully asset backed...granted question are the ships now impaired but really..you have tsken your eye off the ball here with a lot of your analysis...poor companies can become too cheap

Well if current market cap of £228m includes £140m of net cash from raise...the SP is currently vastly underpriced..considering the offer or 2019 earnings for that matter

Mcap £220m..correct me if I am wrong, this now includes the cap raise proceeds of £140m net of costs. So £80m mcap equivalent pre raise....vs £375m declined offer. Have I missed something here?

Its total rubbish, company makes an underlying profit with no cruise ships running haha - so really you buy, you wait. You don't short, hence why we now have zero declared shorts

Rogue, Sutherland is just an awful businessman from what I can see, has a history of wealth destruction. That being said, I think Saga is investable because of the insurance arm. Insurance is rife with mergers and acquisitions. The way you make money is usually scale. I have no doubt that Saga's insurance arm is a premium asset. The cruises for me muddy the investment case TBH, at some point I feel like there should be a breakup. Precovid underlying PBT of this company was circa £100m...so at current prices I think we are too cheap. Expect a rerate to 20p on vaccine news, then will assess.

I was in Superdry when he was there, literally useless

I find it strange that this remains at multi year lows whilst Norwegian and Carnival as well as Aviva etc have all bounced from their lows. Also echo others calls for FCA to look at why the bid news was now disclosed. Water under the bridge now, although 33p does indicate current share price is some kind of joke. Euen Sutherland seems to have a very poor track record, should get the bullet. Euen, if you do by chance read this, please take it personally.

Controversially I think the UK should not have bailed out banks in 2008. That was the point at which free market dynamics died.

Thanks Matlot. Metro Bank has been tossed to the wolves. A lot of foreign investors backed it and the UK government and Cripsin Odey have destroyed it - the best customer service of any bank in the UK...and its on its last legs..I find it sad to be honest. I also worry that the BoE will be too afraid to relax the capital requirements in the current market environment for fear of seeming irresponsible. I think we need riskier banks in the market, its about time we had some growth in the market, where yes, failure is an option, but people price it. This era of zero interest rates and government regulation just stifled competition and the FTSE is a very stagnant, dated index these days. Can only hope Boris the visionary actually makes some changes.

Its not the issuance of the debt vs Virgin that I am focussed on. On the results call the CEO said something like Metro could be 5 times bigger in a regulatory environment more like Germany. At the moment the scale and type of lending allowed with current MREL requirement is prohibitive to growth, the whole point of having the challenger banks in the first place. They can't lend enough to warrant the overheads at this level. In my view the relaxation of MREL is key to this getting back to being where it needs to. They are also opting to address is using rate setter to up the consumer loans. They need to lend more and fast, I think that is appreciated by the board.

I have been reading that the Scandinavians have relaxed MREL requirements, so considering it was only UK and them that adopted them and we are leaving the EU - why the hell has Metro got to comply with this, to the point where the business at this scale is hardly even workable. The BoE review HAS to relax MREL for challenger banks if the gov want their 95% mortgage bonanza.

Objective explanation is, the share price is too cheap but no one will touch it because they think it will go lower - and the only reason for that is shorts and algos. So you have a bizarre situation where people want to buy in but are trying to wait for the cheapest entry. There was a scramble yesterday as Johnson alluded to changes in mortgage market and stimulus in US looked a go'er. That has now been delayed and the algos are back in control.

Since results on 5th August the short % has started to decrease, tells you all you need to know. They are expert at exiting without so much a ripple though.

Yeah its two fold - capital ratio relaxed, more lending possible and also 95% mortgages, bigger addressable market.

I used to be in this so I know the business pretty well. If this is true and the capital requirement is reduced metro business model can be profitable. Tiny market cap considering...

'The government has yet to give details, but it seems some of the 'stress test' rules imposed on banks after the 2008 financial crisis could be relaxed to facilitate long-term fixed rate mortgages at 95 per cent of a property's value. '