Member Info for You_Having_a_Laugh

Some smaller players who manage their CGT are likely to be using the losses too.
Selling into any bounce.

Results, enough said.

How many were placed at 165p? 40M?
How many sold so far? Less.
How close to end of the tax year?
How many more will sell for tax losses to use elsewhere or in the future?
This ain't over yet. 30 days after 28th Feb it might be as some sellers come back in.
We're talking institutions clearing out and distributing to little holders.
They play a different game.

What choice do they have?
Imagine coming out lower than 165p after the £70M funding was pushed via them.
Between a rock and a hard place so they knock 20% off the price target.
Doh!
If only life was so precise, 250p to 200p, 20%.
How long did it take to work that one out?
See what happens with the intangibles , divi, future strategy and whatever else is hidden in the woodpile (not pipeline, that's got very little in it) then come out with a target.

The broker for the deal at 165p is the same house setting the 200p price target so there's some career risk there if they come out with a forecast much lower than that. It's only been about 18 months for it to go down the drain.

Only defense for the broker in the face of annoyed institutions might be to throw management under the bus and blame them.

I don't see anyone 100% fessing up as there too much at stake. Red faces all round.

What bet the divis toast too

Debt, goodwill write down, intangibles & further unknowns. Enough said on that.

Execution risk is still massive as the largest acquisition doubled the company size and introduced major problems they obviously didn't understand. Has that changed much?

We can only guess but I doubt they would have bought Perfect if they had known and a massive amount of equity has gone up in smoke. What has changed except the sacrifice of the Perfect CEO?

Well why not buy more at 5.3p?
All they can control is "e" (ok, perhaps NAV) and it's all they should measured on.

As a micro example they have no control over your decision whether or not to buy more at this price. Similarly, they don't control anyone else's decision also nor any multiple the market applies.

P/e compression will be market wide. It has started to roll-over, comes in cycles etc. You can't fight that one and no management should be measured on that.

Do you really mean they should tout the company like in a talent show? If so, any resultant upside to the sp is quickly lost unless results show through and then it comes back to the one thing they should be measured on again.

Depends what others know that we don't, yet.
The decks might not yet be cleared of all the bad stuff.
Questions:

a) can this market cap carry this goodwill?

b) what other problems will be revealed inside the Perfect business they paid about £102M for. Yes, £102M for something losing business.

In other words the market will decide what multiple it wants to apply to any "e".

If these were bought at high p/e and the p/e becomes compressed over time etc.

Let management be judged on "e".

I disagree.
The market is entering an extended period of p/e compression. The management can only influence "e". A few years from now it will be apparent that p/e's have converged back towards historical norms and that includes for growth companies.

They are responsible for results, not the share price.
The price might not even respond to improved results if money doesn't flow into the shares.
Judge them by results not the sp.

It's piddling amount from 2 non-execs.

How much can be believed. Look at the size of the gap between what was thought about it in May 2018 and now and for all we know there could be other problems hidden in the woodwork. No one can know what is reported back in April 2019. What if they write down the goodwill from the acquisition and say it was a big mistake and return back to the old core business alone, writing it all off.

The old CEO going is a big red flag. Do you know what else might be hidden? How do we know we know what's really going on?

https://www.sharesmagazine.co.uk/article/proactis-the-sort-of-value-opportunity-buffett-might-like

Look at the goodwill that will have to be dealt with.

What are HSBC accepting as collateral cover?

It is based on a low entry price. Give it 2 more years, 3 is to short to turn this round.
I don't have a lot of past baggage on this one.

They had an overscribed £70m raise at 165p and less than 2 years later the market cap for the whole lot is only about £38M. Money up in smoke and the company in debt to the tune of £40M too and it's not a wide market sell-off to blame.

I don't think the selling will have finished yet. There are still millions of shares massively underwater.

Waiting for strategy, which is med-longer, to show through.
I have only been buying recently so not burnt by the price fall.
I can understand how it feels but don't keep swapping the jockey.
One bunch was cleared out, gives these a chance imho.

One change I would like to see is some share consolidation.
Even a 10:1.
Close to a billion shares is ridiculous.

I am a stuck record too and I still don't think there is a full understanding of the crypto potential. It is still only potential, until results come through but with a couple more added to the ETHEREUM work already done it will gain traction.

It offers us all exposure without as much risk as dabbling in the coins.

That market has been battered but it's not down and out yet, at all.

Here, here.
A classic example of private investors hurting due to price falls and looking for something to change or cling to. I'm the same sometimes. The response is quite common.

Good post Sunday.

Forget the past, backbiting etc.
Look forward.

http://traffic.libsyn.com/franklintempletontalkingmarkets/FY19_0095_podcast_Cryptocurrency_Panel_v4.mp3