Member Info for tommy15

Yeah I agree, I spent a while trying to find out about the Newlands but didn’t get anywhere. Maybe they’re well respected in the City? Would be interested if anyone on these boards knows more!

I agree. Pret is a good example - it’s cheaper and higher quality, and also had a strong high street presence and has remained open to a far higher degree, so many may have “made the switch”.

While I think all the “the office is dead” talk overblown, I do agree that some people will take the opportunity to wfh a day or two a week - and it seems likely that the group of people with the freedom to do that will likely be a similar group to those with £5 to blow on a sandwich every morning.

My suspicion is that air travel for business will take a proportionately bigger hit - while I know many people who miss the human interaction in the office, I know very few who miss business travel, especially regular travel. Plus the high cost will be harder to justify now that we know remote meetings are “good enough”.

All of that said - I do wonder if SSP has further to go as a “recovery play”. In general the recovery move has been fairly muted in the UK, particularly when compared to the US where many lockdown-affected shares are at an ATH. Investors here seem to be more cautious - which is commendable - and I believe that the continuing uncertainty around variants, vaccine uptake and safety etc is still weighing down these recovery stocks; I’m bullish on the recovery and hope that this weight will be lifted over the next couple of months as lockdown continues to ease up.

So I agree that I won’t be holding these long term... but not quite ready to give up on them yet!

Thanks Chris

Another part of whether this is a good investment is the opportunity cost. Even if there is a turnaround, there's no way of knowing when it would be (although it feels like several months until a potential trading update is a _minimum_). But if it does turn around then, given how low it is now, it could be a multi-bagger, and still represent a very good return, even if there is months of waiting.

If you have other strong ideas on where to put your money where you expect to see results sooner, that could definitely make sense. I personally am playing the "covid recovery" stocks pretty hard (NEX, FLTA, SSPG, GOG etc), so am thinking of LOOP as more of a diversifying high-risk-high-reward punt. I wouldn't want it to be the core of my portfolio!

I don't think it's a massive mystery why the price is where it is. The question is, is it the holders who are selling at the current price who have missed something, or is it the rest of us who are holding on who will be holding the bag?

I think the overwhelming narrative for almost everyone who looks into LOOP will be "this is a teleconferencing company that manged to do badly during lockdown". As a first impression that is very bad.

Then we have the fact that their new business model involves a risky pivot (they use the euphemism "transitional year" several times in their March 30 statement).

The statement also acknowledges that "it will naturally take some time to nurture and develop these opportunities
through the pipeline sales cycles stages" and "a potentially lower level of top line revenue". This is the opposite to the idealised growth comany where the top line always grows, preferably exponentially. Being a small tech company, LOOP is definitely in the "growth" bucket for most investors, and the prospect of decreasing revenues is a big turn off.

Finally, the only analysts who seem to be covering LOOP, Progressive Equity Research, cut their revenue AND profit expectations for 2021 (the estimated profit for 2021 is now negative; I'm not sure what it was before the revision) because "The RNS strikes a cautious tone on near-term sales, so we take management’s cue and modestly reduce expectation for 2021."

So that's it - many potential investors will take one, two or even three looks at LOOP and decide it isn't for them. We don't need any market manipulation or aggressive shorting theories to explain it.

Could there be a turnaround? I'm still here, so personally I think it's worth a punt, but I acknowledge it's a risk.
- Ocelot's theory on why LOOP's new business model is a strong offering is compelling
- Despite the analysts saying they "take management's cue and reduce expectation", LOOP's statement also says "the Group is confident in its ability to meet market profitability expectations for FY2021". Could be a surprise on the upside here
- in general this feels like a market overreaction. The market is reeling from realising LOOP isn't what they hoped it would be (a high-growth tech stock in the remote networking space, an area that the pandemic put in the spotlight) and are shunning it unfairly; eventually they will take another look and - I hope - agree that it represents a bargain.

Feels like the market as a whole is a bit edgy about the AZ news and it's potential impact on the vaccine rollout & easing lockdown - not unreasonable.

Bear in mind that in normal times North America accounts for ~40% of profit and the US vaccine rollout is going great.

Still very bullish on this.

I think that would have caused a sharper drop - the slow and steady decline normally means one big holder selling down.

But agree that the current news could make people jittery. On balance I think the re-opening is likely to continue according to plan, since we've already achieved enough with the vaccination rollout such that hospitalisations should be kept low, and we have more vaccine suppliers coming online (i.e. Moderna). But whether the market agrees is another question...

NEX does lots of business in the US where the rollout is going great and isn't affected by AZ.

Slow and steady decline today looks like a large holder selling down their position.

Maybe just taking profits after a good couple of days? Still surprising since I'm expecting this to continue upwards.

n00b question, but for the "LOOP Share Trades" buy / sell info, how does it determine what's a buy and what's a sell? Surely every trade has both a buyer and a seller?

I assume it's about who crosses the spread - so a buy is when a buyer crosses the spread and removes an existing sell order and vice versa - but wanted to clarify if anyone knows for sure.

No, you haven't missed out.

The big move today was because the shares went ex-rights, which effectively means the deadline for determining who gets to take part in the rights issue has passed. If you already owned shares then you're in.

You should be hearing from your broker by EOW (or early next week) with details on how to take part. I'm going to give mine a call if I haven't heard anything within a week or so.

I'm also sticking to my theory that there was selling last week so that investors could realize losses and offset some gains for CGT purposes. We might see those actors trickling back in as the B&B period expires, assuming they're still interested.

Very interesting idea, and fingers crossed that you're on the money here Ocelot.

I guess from my point of view this still isn't ideal. I came into LOOP thinking of it as a classic value play, and now it has become a turnaround story - and in a slightly different industry (telecoms vs software) that I'm much less informed about.

That doesn't mean that LOOP isn't a great investment - it just means I feel much less confident in making that call!

Ocelot I'm inclined to agree. I'd be very happy to be bought out, and that this price it seems attractive, but would hate to miss other oppurtunities while waiting around for that. I imagine they'd have to show a good few quarters of positive results with the new strategy before a telco would buy them out based on it.

Can anyone recommend a forum that isn't full of users like bigsmoke, spamming the board with meaningless drivel and getting aggressive at anyone who shows the slightest bit of critical thought?

If you can I'll happily move there and leave you guys with your salt.

Ocelot thanks very much for your reply, very useful.

So the niche they are targetting is "predominantly medium-size businesses, that have a presence in more than one country", who for whatever reason aren't interested in using one of the more "significant Microsoft partners" where their differentiation vanishes.

Out of interest, do you think this strategy is viable?

Do you agree that the market's uncertainty about this strategy is behind the (lack of) share price movement? Or have I missed something?

Could also be people looking to crystalize losses for the CGT writedown.

Given the year we've had I suspect most people have profits, meanwhile there's no momentum here so people are happy to lock in a loss, pay a bit less tax, and feel they are unlikely to miss out on any big movement in the next 30 days.

Sorry what do you mean exactly by "taken out"? M&A? Went bust? Delisted? Something else?

Did all the examples you listed end badly?

So while the valuation metrics look good on paper, they have to be taken with a big pinch of salt because the entire business model is being switched out for something much more experimental.

And actually the forward-looking statements aren't that positive. The shiny new Cloud Telephony segment - to which the company is pivoting and spends half its update talking about - attracted 3 contracts this year, TCV of £0.64M. So that's one contract a month. I know it's early doors - this was only released in July - but the market needs more than that to get excited.

I suspect the drop in price is because more people have got over the initial "more revenue YAY" response and have thought more about the above.

Oops got cut off

- if you Google "external phone call microsoft teams" there are a ton of competitors. Again, LOOP says it is differentiated, but at this point it's gamble whether the differentiation is worth anything (and again, the evidence from the pandemic is that unfortunately it isn't).

The penny has finally dropped for me on why the share price is so restrained: LOOP is effectively a gamble.

The reason being that LOOP is in the middle of what must be a very risky pivot: from providing its own remote meetings solution to being a telephony provider for Microsoft.

Historically their product has been the remote meetings software that has attempted to differentiate itself from its many competitors by, above all, better resiliancy to poor network conditions and higher call quality. So no wonder the market reacted badly when the pandemic hit and it turned out that their differentiated solution was in no way worth the money comared to the many alternatives. And let's face it, Zoom and Microsoft employ top-tier engineers and there's every reason to believe that they will be able to catch up with whatever advantages LOOP currently has for the "Professional Services" niche where the high call quality is particularly important.

Somewhat to their credit, management appears to have accepted the above and so is dropping the investment in the software (which the consumer market voted against with their feet) and is instead focussing on their connectivity infrastructure, relationships with global telephony providers, and strong compliance offering. This Cloud Telephony offering is front and centre of their recent update, with quotes including "The market spotlight is squarely on the cloud telephony market", "The cloud telephony market is forecast to become a $26 billion market by 2024", and talk of 2021 being a "transitional year".

So in many ways this is a recovery play, but with the attempted recovery somewhat accelerated. And the market has plenty of reasons to be cautious:
- we can't get away from the core truth that when the sh*t hit the fan and we all had to work from home, very few companies choose LOOP's core product offering - their remote meeting software - which means they're clearly doing something wrong
- they talk of their Cloud Telephony solution being "internationally differentiated" - but is it? How wide is their moat, if at all? The market is being asked to form an opinion on this on very little information.
- they describe Cloud Telephony as "enabling customers to make and receive external phone calls via Microsoft Teams". Note that Microsoft already offers this capability directly (see link at the bottom). You have to pay for extra licensing, and it looks like there is some degree of faff in setting up and maintaining the system, but it remains to be seen how much additional value LOOP offers to make their stuff worth paying for. Again, their big differentiator is that their telephony network is designed for resiliancy and higher quality calls - so it sounds like the same set of customers for both Cloud Telephony and Remote Meetings, hinting at a risk of cannabalism.

Microsoft external phone calls link: https://docs.microsoft.com/en-us/MicrosoftTeams/set-up-calling-

Very glad to admit that I was wrong, feels like management have done a reasonable job this time of giving a clear and positive update.

That said... a bit surprised this seems to have stalled out here, up only ~10% from when results "should" have been released. Definitely feeling more comfortable about holding longer-term after today's update, but feels a bit like the unknown spectre holding the price back is still out there!