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Someone just puts materially more efforts into professional research than average retail investor.
There was administrators (KPMG) update heads-up issued on 29th Nov with meeting later on 2nd-Dec, it's all there in link by Ecclescake. In short: still no hopes for shareholders (as DOCA sections point out) as unsecured creditors are way to far from recovering much from all this mess and sadly for everyone - it's at low end of single-digit percentages.
Not surprising at all, formally it's still in "doubtful solvency" having "suspended" status, not delisted from LSE.
Liquidations can take years, esp. considering covid-related issues with courts.
The fact what there's no regular progress report - is really a bit disappointing,
would be interesting to see where this ends up.
"...The problem is this market is exploding with nearly no rules or oversight..."
Let's put the regulators everywhere, bureaucrats need jobs.
Effectively these two messages are taking 50% of the clip, it might not be a positive "marketing" for Burford.
They present it as gambling.
"...Investors bet on the outcome of a large lawsuits the way traders bet on stocks..."
https://youtu.be/gcq7UDVPK5k?t=8
idk, not going this path, so don't need to know.
they're delisting from LSE and moving to assetmatch.com (already listed with next auction date).
How long it will be there is a different question (you can check other tickers on this resource).
I haven't seen much of a liquidity on that resource. It might be just transitionary too (moving later somewhere else with less accessible conditions).
Being minority on a off-market equity has it's own specifics is not for everyone, comes with strings attached.
Losing everything is very unlikely, bank is not even close to that state (although there might be bank-run pressures on deposit side based on news and better conditions elsewhere), it's highly regulated industry after all and I'm sure BoD will do everything they can to minimize asset value loss over a slow wind-down/loan-collection while tuning the costs.
I'm just saying that realizing/monetizing paper equity (and possible gain) into hard cash might be quite a challenge and a very disappointing experience.
My risk radar says there's no sufficient data and too long chain of hurdles until investment-horizon completion on this position to make an investment call despite (and if) potentially high returns (multi-bagger) or risk-premium. But someone with higher stake is probably more willing to put an effort into this and follow it though pushing until the end. It all depends on appetite after all.
Bradwiletts - spread 75%-100%, one share trade at upper bound and next moment at upper and it's on a top of volatility list.
Catabrit, apologies for spreading FUD but you've used right term "bet" since as it stands now it is a gamble after all and not an informed decision, this so called "consensus" is pure guesstimate, there's no more or less reliable outcome probability distribution, not to mention on nightmares with "paper equity" (due to monetizing issues) retail minority investors often go through after delisting: from troubles with liquidity (and consequently huge spreads) up to majority holders (whoever they are Somers or Provident - both are under Bahamas offshore jurisdiction) pumping equity out to solve their problems (e.g. providing services for almost free {since free isn't allowed}, appointing their directors and paying salaries in this entity to avoid having all costs there and so on). Somers calls the shots and takes care of their investors on a first place, minority here may not ever see any dividend or residual distribution despite (possibly) having some promising NAV after all this dusts settles (or getting something back right away after most of loan principal matures and the rest is sold if PCF borrowing/other operational costs + write-offs don't wipe everything out).
It is high-risk (and high-loss possibility) gamble with lots of unknows and a long road to potentially positive probably high-gain outcome. At this stage it's less of an investment more of a gamble.
Nice self-reassuring mantra but it's covenant test deferral on a first place (which is a red flag on itself) and if lenders can't get money back (balance sheet shows £8m on liquid assets/cash equivalents vs £13m longer-term debt) as per contractual obligations (since clam provisions and money of some other creditors are ring-fenced, as well as money collected from their loans if these are secured but that buffer hasn't even started filling yet) it would mean automatic loan recall and insolvency/default anyways (there's no money, these are still stuck in customer credit), so generally they don't have much of a choice but only to extend it (as it doesn't seem to worsen their position).
HarChris - from my quick course of microeconomics I remember what variable costs are first in acceptance criteria when decision to continue operations are made, if you can't cover VC (and it's not just a temp troubles but fundamental shift) then stop immediately.
During a dark times coverage of fixed costs comes rather as nice to have option.
To be honest from latest report it looks like they're relatively holding well, equity recovered (share-printing).
Although the loss from continued operations is still there (and luckily offset by non-core element later on as seen on Comprehensive statement) - it has reduced drastically from previous results.
Not a bright future in current recessionary environment - but at least they've done homework well enough and delivered adequate stabilization measures.
With mining costs up that much (energy prices and difficulty vs hardware costs) at BTC at $18K it's not even profitable to mine at industrial level, probably the only way it might be justifiable is if you get hardware for cheap on an auction from bankrupt miner and plug it to heat your home at winter.
Another Thomas Cook is cooking?
Now ask inevitably has dropped too but there's no way out of this, effectively everyone is locked out, nobody can close position without sacrificing huge chunk of capital (if anything material is left there anyways).
Spread 86% from 55% last week, no liquidity, ridiculous number of trades and even those are for amounts of £20-£30 worth, no takers.
So effectively what they're saying:
1) there's no value left for existing shareholders
2) all residual equity and future profits goes into the scheme for compensations
(that won't be enough to compensate all affected customers but at least better than nothing)
3) they will try to raise more equity (I suspect outcome is easily predicted)
If nothing works - it is immediately insolvent.
Re:
--------
... I see the debt to equity ratio as one of the the most, if not the most, useful metric. They are as follows:
Corz 20:1
Argo 3.5:1 ...
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Looking at their June accounts it seems like on a paper (without going actual fair-value details) equity was £165m
and total liabilities £138.5m (with bond debt £40m) therefore debt-to-equity is rather 0.24:1 or 1:4.13 (situation obviously has changed by now).
by the way - checking their March it seems like break-even BTC price was at above $30K
that's considering cheaper energy, lower hash complexity
today's BTC is $17K, energy costs +20%/+30%, hash difficulty +27%
suggesting operations are highly loss-making (e.g. break-even is at above $50K+)
do they even cover variable costs? (since fixed costs are way too far because technology assets can be discounted for at least 60% outright). If not then pulling the plug right away is probably the best option to protect creditors.