Member Info for Tornadotony

Buys starting to go in. Around 16.1 to 16.15. Heavily supported at this point last time.

Gold prices and the revision downwards on USA employment is probably telling us something. 67% of USA consumers are underwater. Car loan debt is now greater than the value of the cars being driven with 6 to 7 year loans which is 55% of the market bought on loans. Commercial Property debt defaults are now surpassing significantly those in 2007 and 2008. Tariff inflation about to hit as well. Keep plenty of capacity to buy on any big pull back.

The downrampers will get on to recovery rates next. If they do a good job of shaking the tree we may be able to get shares at 15p,

SP is beyond any form of training and will choose his freedom to stir things up. I have no problem seeing RBW retreating on share price in order to back up the truck myself and load up with more shares. In fact that is what SP probably wants you to do to after off loading some this morning. It gives SP joy getting someone else to FUD on one of his stocks when he wants a cheaper price. SP likes Reetech as being his useful idiot in being a down ramper in that regard but he/she might be on holiday. So no offence taken by me at least if some down ramping is offered on RBW as it will be exploited if you do a good job of it. Tony

Dummy sell price quote is 17.07p. Really it is 17-17.5p this morning thus far.

Looks like UK 30 year Treasury rates have broken out higher.

My entry position has been to early this time as the previous range bound has broken. Fortunately, only a small play that I can leave for the next divi..

Back in just under 1026p as support thus far is likely to hold. Bad form to wipe out major support lines with a USA market close.

From 5 minutes and 10 seconds is the crucial bit of info.

Regards Tony

(Recovering well from second operation being nursed by wifey).

Sold off initial buys at 1063p.

Two support lines broken this morning. Remaining support lines are at 1025p, 1006 and 984p with the first and third of those being the strongest.

1. The standard of RNS communication is not transparent and is deliberately vague and that includes forward as well as on-going performance.

2. Max Izzard is fully aware of USA accounting measures as 18% of Burberry stores are USA based. The error that has occurred was either deliberate or incompetent. Either Max Izzard was trusting other staff on information they provided wrongly or he wanted to misrepresent the strength of the company as they were selling assets.

3. Who has called in the new auditors and my guess it is the Chairperson of the company .

4. Whatever story or model was previously proposed is under investigation and that is now a fact and why so many organisations now short the stock and why high quality organisations like Blackrock sold off which is something they do not do in a panic. There is a major governance issue being checked out.

I recall Tullow oil having their CEO and head of oil exploration fired by the Chairman after an investigation where the story told to investors was untrue. the share price fell from 130p to 35p when suddenly production data fell just by 20%. It transpired that a false data was put pass the CFO who was kept in post.

I have tried to do an analysis to see why things arose as they have done so. It is a gamble either way and everyone is responsible for how they manage their own money on what they do here. I have read annual reports and gone through quite a bit of paper to see if WH Smith story on the future holds up. What I come away with is an 8% margin company that is trying to grow on revenue volume by growth. It can work, but not well in a recession with a danger of higher future rates. I find the communications from the company are below average. God knows if a 3% or 7% figure is rounded up or down. A board that values divis is great but share buybacks over reducing debt is another issue. The auditor's will find out if complacency and arrogance and lack of risk management are issues here and the one act of immediate intelligence that has been proven was doing so quickly.

The annual report identified revolving debt drawdown in 2024 at £117M. In addition to this in February the overdraft facility debt was £56M and of course on top of this another £310M bond due May 2026. Overall actual debt is running at £483M with higher draw downs planned on the revolving credit. This figure has to be added into the enterprise value.

I suspect the revolving debt facility will be near £200M in total and net debt is somewhere around £560M for the next annual report. Partly as they gave a lot away in divis and share buybacks.

At present lets assume over 5 years they pay off all the debt from profits and carry on with dividends. The company current enterprise value is probably £1.35B at todays share price with all the debt included. At £110M forecast earnings this year as net profit is 12.25 PE rate. At £140M profit it would have been 12.5 PE rate at £10 share price.. The penalty adjustment is 0.25PE which is probably not far from the PEEL target price of 755p to get back near 12.5 times forward earnings.

I conclude that the share has found the correct price valuation area. Hence why many analysts are calling it a hold until the audit is complete.

High pokerchips

The name tag sums up a lot of the behaviour the board.

An RNS should come out with commentary from the Chairperson. Any company CFO allowing shareholders and bondholders to assume the company was managing debt on a 1.5 debt to annual projected income ratio which is now closer to 4 times should be fired. In fact if the CFO was fired and the Chairman was to take control and appoint a new CFO and gave assurance the highest standards of governance were being applied then some kind of rally this morning would be deserved. If a company pretends it is like a FTSE 250 outfit yet is operating like a bunch of wide boys in an AIM company then it really is not on. Deloitte will be over all this company like the measles over a baby. They will look into company director numeration policy and see the motivations on what was going on here.

The auditors had to come in as institutional holders had an investment in breach of its governance requirements. Essentially the company presented a story of increased profits to both shareholders and bond holders that was false. The auditors may well ask why priority is given to paying dividends and maintaining debt levels at what was originally 1.5 earnings which is now 4 times annual earnings. This is absolutely appalling itself as the company was presenting its position in what was a stable debt against earnings to one that is far from stable. The debt interest in the coupon would be seriously downgraded to low B or C. What has happened is quite serious fraud played down by the Board. I am surprised that people have given is a dead cat bounce at the open.

The issues are;

1. Has the company breached the conditions applied to its revolving debt facility that was due to be repaid on 7 May 2026.

2. The company losses were already running £50M higher than projected as to what was planned in previous financial reports.

3. The company was heavily shorted two months ago as operations intended to support the repayment of bonds were instead given away as dividend and share buy backs. Analysts were reducing forecasts on earnings by 30% back in June.

4. The RNS collapses earnings by half of what they were being forecast by analysts that were given in January.

Not surprising outside auditors have been called in. The error in the accounts is within an envelope of other poor news.

Gamblers market to play on this one. Could be okay or it could have been run by a poor CFO appointed around 18 months ago. The bonds revertability may have conditions that now require payment or someone else to take on the debt at a far higher rate than 1.65% upon expiry.

Doing £50M buy backs and 5% divi on multiples of annual debt on earnings shows where the priorities were. I wonder what the bonus figures on performance were for board members and whether any cashed in.

Https://www.marketscreener.com/quote/stock/RAINBOW-RARE-EARTHS-LIMIT-33647072/graphics/

Use market screener to pull up charts. The daily chart has resistance at 17.5p and there is a chance of a retest back on 13.25p where the support line is.

Yes on the first operation and I would say 90% recovered and was able to drive to the local shop. Should be 100% by the weekend, but banned from any gardening until end of month.

Initial buy positions in ISA and trading accounts 1034.89.

1. Defence industries were on a pull back re-Russia talks. (Headwind)

2. China tariffs by USA delayed 90 days. (Tailwind on hold).

3. CPI print early afternoon. Higher inflation read is bad for equities and bonds no inflation the opposite being true.

A traders day with playing on the risk of outcomes.

My recent operation successful. A second one being scheduled probably in 3 weeks. Looking forward to October. Your health is way important than anything else. Always look after your health. Tony

Reetech,

By all means help the RBW share price to retreat so that we can buy a shed load at a lower price. I just wish you were honest about that being your purpose here. Tony

I will be off line for several weeks as I have surgery end of the week.