Listen to our latest Investing Matters Podcast episode 'Uncovering opportunities with investment trusts' with The AIC's Richard Stone here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
My elderly father notionally owns over 4,500 shares still. Or does he: what can he do with them?
What a sad end to what was once such a star in its field. Frankly, the whole thing has put both me and fellow shareholders [and stamp collectors] off Stanley Gibbons for life.
Presumably that was the idea.......????
I suspect the company is now going to undergo a degree of financial engineering on its accounts following which [in a few years by which time Phoenix judge that everyone has forgotten this debacle] no doubt it will come back onto the market as a re-born company with no debt etc to entice a new load of investors in!! How these things are allowed to happen.......just remarkable
24-Aug-22 11:59:25 1.645p 30,000 Buy* £493.50 !!
Why buying if can only sell at 1.50p ??!!
Hi devonplay, I'm also invested in HBR and DARK. HBR is now near £4 with GS forecasting sp of over £6 with higher oil and gas prices en route, their major shareholder will wait to sell if it has any sense !! DARK are currently over 540p having announced takeover interest from a US private equity firm during the week. I can see a £6 bid before the Sep 12th (?) deadline !! These two are good defensive stocks for a Ukraine Russia 'military exercise' !!
DARK, HBR, or SFOR. They are all great companies LOL
- isn't HBR nearly 30% down since may and it's major shareholder is selling out?
DARK, HBR, or SFOR. They are all great companies ...........all best avoided if you ask me.
Conflict of interest, loaning money and also investing in a company.
(1)A director of a company must avoid a situation in which he has, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with the interests of the company.
Andy, your comments duly noted but I will be giving ARB a miss. I disagree on the investibility of bitcoin nowadays, and now the regulators are all over it, the attraction of anonymously buying it are disappearing down the drain. ARB is the best in its sector, but again, with the record fuel prices, how can one invest in such an energy devouring company?
I've spoken enough about SGI to last a lifetime and vented my spleen over how unfair the deal is to shareholders, but it is Phoenix who will have to deal with the ensuing PR disaster from this unnecessary take over they decided to do.
Stamp collectors are a close knit community and this will have gone down really poorly with them - indeed I have received phone calls already from a number of very disgruntled investors who have also had to sell and are now never going to buy from SG again. It was a completely unnecessary deal that screws the main supporters of the company! That's a great idea, isn't it?
Anyway, as you say, onto better things with my new liquidity and you will find me on DARK, HBR, or SFOR. They are all great companies with very narrow spreads and there are often volatile movements.
Well Pearls with your new found liquidity you might want to look at ARB!
Thank God when I got out of ARB at just under £3 I didn’t take any notice of your incessant ramping of SGI on that board.
Karma is blessed indeed.
"I only wonder if it'll not end up with simply Phoenix having nicely increased their holding in SG at this price and it'll remain on the Exchange... They paid 2.5p to get involved why not take another lot of shares at this price..."
Very, very unlikely. They'll stop just under the point where they are required to make a formal bid, but guaranteed to get the stock delisted. As they can pull the trigger on the debt at any time why would they show offer anything more. My bet is they take it private at 1,5 revalue it upwards sometime down the road and show that as increased NAV in the portfolio of one of their other vehicles. It's pretty much worked out as I said. Overall I think they are being generous in offering 1,5p....they could have quickly turned it in 0p.Peals correct....it was only months ago there was that 20p prediction!
It looks like SGI have lost another customer. Pearls, it was always there in the tea leaves....don't take it out on them now. You were always so excited about the auctions and fractional junk. Just enjoy the largesse they are offering at 1,5p...it could have been so much worse.
I only wonder if it'll not end up with simply Phoenix having nicely increased their holding in SG at this price and it'll remain on the Exchange... They paid 2.5p to get involved why not take another lot of shares at this price...
I didn't see any point to comment before because nothing that would change. Nor I see now... I simply agree with you, Pearls. I'd say that your reasonings about SG over time were correct... but - like I suggested in one of my posts sometimes it just isn't good enough. Now we know why this share never appreciated on any good news... It wasn't supposed to. Also explains the last tree shake. IMO. Huge disappointment and a very sad case.
I have now sold my shares to Phoenix at the bargain price of 1.5p and sitting back and reflecting on the whole thing, what most perplexes me is why Phoenix chose to do this at all. I accept - as per Devon's comments - that it was a smoking gun in the background always able to go off at any time, but a number of years have gone past since Phoenix got involved, and they must now know a lot more about SG than they did originally. In particular, the deal is priced at so low a price that shareholders must generally be taking substantial losses on their holdings.
This is unnecessary. Phoenix had the financial firepower to make a more generous offer, rather than deliberately moving to short change current investors.
The after effects of this deal are likely to be a completely disillusioned staff, and many many disgruntled ex-shareholders who feel badly short changed - many of these will also be collectors who will now shun the company.
The deal was priced too low, there was no need for it now, none of the reasons given by the RNS stand up to heavy scrutiny, and in reality we are being forced to accept a bottom rung deal. I for one, will no longer be supporting SG or Showpiece after this and I suspect that will be a general view.
This has been a completely unnecessary unfair cheap deal that cuts out current shareholders before the real recovery in the share price was allowed to happen.
Closer scrutiny for example of the current financials would have revealed that the reason for the debt increase was the inclusion of the 1c on SG's balance sheet, but actually this is creative accounting only - the stamp is owned by Phoenix.
Does anyone else agree how poor a deal this is?
Looking at todays trades it looks like a couple of people didn't get the message
Thanks Devon - comments duly noted and agreed with. In fact I can now answer my own question as it would appear that 75% at least of investors have backed the deal so it is going ahead. A raft of late advised trades were advised last evening, so it is now a done deal.
I just hoped Phoenix would be more positive for the shares, sadly this was not to be, but at least I am now out of such an illiquid stock. I just feel sorry for the staff who, I agree, are irrelevant frankly to Phoenix's longer term ambitions and presumably are completely disincentivised by the deal.
Presumably this also now negatively affects the market valuation of Castelnau given the constituent parts of it, but this has been a salutory lesson - it looks like I will be sticking to trading DARK and HBR going forward.
"I would like to know one thing - why do you think they have pulled the plug on the listing now? "
- it's easier to attribute value to a private company than the public one. There's no weighing machine that is the stock market.
- they failed to achieve the momentum that you expect of a growth stock, the trading looks and feels poor
- it saves them money on listing costs..every penny must count.
- it's easier to carry out "restructuring" outside of public scrutiny. Public turn-arounds can be painful when every one can read, and comment, on the required "list" reporting.
- it's time consuming, private company consume less over head
- I've also wondered that at some point, it becomes a subsidiary of one of their other vehicles. That might shore up under performance somewhere else IF they eventually turn SGI around.
I don't think the staff matter much in this, as I've said before, I think the only value in SGI is the brand (hence 0.5 valuations) and the existing staff are just grist for the Castelnau mill.
As you've said you before....they are masters of financial engineering. Unfortunately, in this case, that could be at the cost of SGI ordinary shareholders.
Companies with a controlling entity often get heavily discounted for the reasons we are seeing here. What you've readily described as a supportive shareholder....was really always a great big flash red light...screaming DANGER.
If you are suggesting that one shareholder is privy to more information that the market "privy to much fuller figures" that's bad news for minority shareholders like you.
You are nothing more than flotsam and jetsam...with SGI it's the dictionary meaning "The remains of a shipwreck still floating in water"
It's been a floating ship wreck for years.
Devon, those are good comments. In fact I agree with your analysis.
I would like to know one thing - why do you think they have pulled the plug on the listing now? My contention is that they are privy to much fuller figures behind the scenes and can see there is some sort of turnaround developing. But it does seem to be stopping staff from participating in the turnaround and you would have thought it to be very unpopular with the company. Why is it being done now, in your view - after all you have queried why Phoenix have kept the listing in place for some time previously?
Phoenix will preserve their assets in default, the Magenta returns to them and they'll convert their debt into equity after default. By your calculation, but you've not taken into consideration the holding of other collective vehicles, which you presume the Directors have already been in contact with and that's why they are confident about the de-listing going through. If the it fails on a vote, it will be pushed through under the statutory powers Directors have to avoid a company trading in an insolvent manner. They'll negotiate with Phoenix, that will result in them not being a going concern and they'll transfer ownership to them for a pepper corn value. They wouldn't lose their shareholding, they just gain 100% ownership out of the insolvency. They wouldn't losing anything of value, just the cost of being listed. Debenhmans, like SGI, had multiple creditors, but like SGI, Debenhams had one major stakeholder in the form of it's Sterling bond issuance. They formed a creditor committee and operated in unison. So it's in fact very like SGI. If there's a chance that Phoenix will withdraw it's funding line, other creditors might take the step to pushing SGI into a wind up, if the Directors don't do it before hand. I believe Phoenix will act first, and with secure their position, in default, ordinary shareholders will be washed out of the mix.
Devon, those are absolutely fair comments, but the situation here is not like Debenhams. After all, there is only one creditor here - Phoenix - who also happens to be the banker to the Company and its main shareholder. It's already in a state of default, and has been for the last few years, it's merely the largesse of Phoenix that kept the whole thing rolling on. So if Phoenix pulled their support, they would lose their 58% shareholding which cost them £19.45m in 2017, they'd lose the banking facility and the £23m owed. I get that they obviously would then try to preserve their assets, but frankly those must be small compared to these sums?
Lombard Odier [LO] at 4.94% was the only other shareholder of any size, so that is roughly 63% of the shares controlled, assuming LO agree to the deal, but just look at today's trading - only 0.5% shares sold, of which there have been a number of buys. 3% were sold on Friday, 0.5% today, I do not think it's certain they will get to 75% at this rate - currently we are at 66.5%.
I also think many of the shareholders are staff, and they are really treated poorly by this deal - having worked hard to keep the wheels on the thing over the last few years, they are now not able to share in the turnaround when it comes through - that is unfair, especially as they are being offered such a derisory amount for their shares.
Highly unlikely Pearls. Let's see what they say:
"However, Phoenix Asset Management Partners has also confirmed to the Independent Directors that if the Resolution is not passed, it would be necessary for Phoenix S.G. to reconsider its continued financial support for the Company and the Company should not rely on that support if the Cancellation is not effected."
That would be a TOTAL loss for ordinary shareholders, but you could bet that the business would fall into the hands of Phoenix on default.
"As the Company's largest Shareholder and the provider of all of its existing debt facilities, the continuing support of Phoenix S.G., is fundamental to the ability of the Company to continue to trade and the Independent Directors do not believe it would be possible to find a third party willing to provide such support on equivalent terms. The continued support of Phoenix S.G. will also be a pre-requisite to obtaining auditor sign-off as a going concern in respect of the Company's audited accounts for the year ended 31st March 2022."
TOTAL loss if it's not a going concern.
"Given that there is a strong likelihood that the Resolution will be passed,"
That suggests they've already spoken to other major shareholder who are going to be supportive.
As we've been through this before...if the company defaults the Directors will have to move to protect the interests of it's major creditor, in that case it's likely Phoenix will preserve it's assets, but the ordinary shareholders will be completely wiped out. If you remember Debenhams, creditors pushed the company in to default, restructured the business and swapped debt for equity leaving the previous shareholders with nothing. There's nothing to suggest that Phoenix wouldn't preserve their position in default, but you'd lose everything.
Seems to me the 1.5p offer is completely opportunistic, taking advantage of shareholders perception that without Phoenix, the company would collapse. The more I look at the threat within Phoenix's offer, the more I think it is worth challenging.
How likely is it that Phoenix will pull the funding for SG if they don't get their way with this offer?
I'd say it is close to non existent. If they declared SG insolvent, they would lose their 58% shareholding immediately - it would become instantly worthless and it cost £19.45m to acquire, in addition, as per the recent offer and update, SG now owes them £23m. so I would guess that on top of any other liabilities etc Phoenix would be looking at a paper loss of close to £50m if they pulled the plug.
Is that likely or is this an enormous bluff? The fact that so few shareholders are selling out combined with the buyers coming in today, rather indicates that shareholders are weighing the whole matter up and are not rushing to sell, at all.
Phoenix wanted 58% of the company a few years ago to pay 2.5p a share for it, they should pay at least 2.5p then for the remainder of the company. I reckon other shareholders are realising this too........
another decent purchase just gone through - this opportunistic bid at 1.5p is looking increasingly likely to fail.
Little take up of Phoenix's cut price basement deal for the shares.
In fact there seem to be some buyers emerging this morning!
If this continues, it may force Phoenix to pay more..........
427m shares in existence, so 4.27m = 1%
Friday turnover was about 3%, so far not even 0.25% sold to Phoenix.
Castelnau,
Lets pretend.
Let's say you had a strategy to buy bombed out stocks, and then try to pump them on a chat site....could you ever admit to making anything less than small loses? If everyone knew the strategy was a disaster. How little notice they'd take. If they knew you were chalking up huge losses all the time.....better to talk about profits and little losses.
5 NIL :)
'For me, I have to admit, much as I was a fan of the company, my large shareholding had become too large to sell at ordinary prices, so it had become a prison for me, especially as I averaged further down. '
Pearls how do you only make a tiny loss when you bought in at 50 times or whatever what you just got? 'Averaging down' JUST INCREASES THE LOSS when dumping at 1.5 PENCE.
Thanks look forward to reading it, enjoy the Festival !!