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#10381 Investment novice

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Posted 09 May 2018 - 11:41 AM

Another scenario to consider is a rights issue, given all the debt SNH has.

could they do a rights issue at an inflated price compared to current trading prices say r12 hypothetically and limit recipients of the issue to all  debt holders. this would be a negotiated amount???

this sounds difficult with current information holes....but definitely could be share allocation without a value per share agreed or a sliding scale or something more concrete.....

Wiese mentioned listing the property portfolio and related rental streams- perhaps this could also be allocated to debt holders.

shareholders and legal claimants will all be managed at a later stage as the quantum of the claim is reduced with  recovery- and of course these things may take 3 to 4 years to work through.....


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#10382 Shi

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Posted 09 May 2018 - 11:22 AM

Another scenario to consider is a rights issue, given all the debt SNH has.


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#10383 Investment novice

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Posted 09 May 2018 - 11:05 AM

There is also the other option the big boys can take... and that's to increase their initial investment in an effort to lower their average share. 

Below you is a simple example working on what Polly said eg 1 mil shares @ R80... R14 mil can get their average share price down to R11.75 

 

price per share amount of shares value of investment average share price     80 1000000 80000000 80     2 1000000 2000000 2               Total extra invested investment status 2000000 82000000 41   2000000             price per share amount of shares value of investment average share price     41 2000000 82000000 41     2 2000000 4000000 2               Total extra invested investment status 4000000 86000000 21,5   6000000             price per share amount of shares value of investment average share price     21,5 4000000 86000000 21,5     2 4000000 8000000 2               Total extra invested investment status 8000000 94000000 11,75   14000000             price per share amount of shares value of investment average share price     11,75 8000000 94000000 11,75     2 8000000 16000000 2               Total extra invested investment status 16000000 110000000 6,875   30000000             price per share amount of shares value of investment average share price     6,875 16000000 110000000 6,875     2 16000000 32000000 2               Total extra invested investment status 32000000 142000000 4,4375   62000000             price per share amount of shares value of investment average share price     4,4375 32000000 142000000 4,4375     2 32000000 64000000 2   Total extra invested           126000000 investment status 64000000 206000000 3,21875    

 

This is still an incredibly high-risk option. But this does mean they do not write off R80 mil... 

 

All of this is still under the assumption that Mr. Alan Grey has the same view as @Investment Novice, meaning they believe the share price could/should be around R20 as share if restructuring occurs. This would also mean that they could recover all of their losses suffered since Dec.

 

Like I said this would be a very unlikely move... but then what's another R16 mil for one of the big boys, considering the possible reward(and not writing off R80 mil).

 

Any thoughts? 

Ram - if you hold the belief that SNH is heading for bankruptcy you exit all your holdings and don't aim to dilute the share price as an additional R20m to the R60m or R80 m means an additional R20m in the hole. and you would have to justify to your investors that hold you accountable why you made the investment and through even if just a pittance.....

However if you of the belief that there is a likelyhood of recovery - a percentage of recovery,.....then you aim to lower your average cost of investment below the potential recovery amount to make a profit, break even or limit overall loss.

can there be some recovery? billion rand question?


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#10384 Ram85

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Posted 09 May 2018 - 10:51 AM

Apologies for the gibberish in the middle of my previous post.

My excel grab look correct in the post editor... but when I posted it, it looked terrible. see attached

 

 

But essentially it shows if Alan Grey purchases an additional R14 mil shares @ R2 their average share price should be down to R11.75 

Attached Files


Edited by Ram85, 09 May 2018 - 10:54 AM.

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#10385 Ram85

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Posted 09 May 2018 - 10:34 AM

IN let me use arbitrary figures by way of an example how the big boys play this..

 

Assume AG has 1000000 shares in at R80.00    = R80000000 invested before the crash

now trading at R2.00

 

Pays them to take a big risk

 

Buy another 1000000 @R2.00                           = R2000000

 

they probably wrote off the R80m....whats another R2m  to reduce risk even it that R2m goes to zero. They just of the opinion that the R2m is good risk reward...Not investing because they see it as a recovery...

 

There is also the other option the big boys can take... and that's to increase their initial investment in an effort to lower their average share. 

Below you is a simple example working on what Polly said eg 1 mil shares @ R80... R14 mil can get their average share price down to R11.75 

 

price per share amount of shares value of investment average share price     80 1000000 80000000 80     2 1000000 2000000 2               Total extra invested investment status 2000000 82000000 41   2000000             price per share amount of shares value of investment average share price     41 2000000 82000000 41     2 2000000 4000000 2               Total extra invested investment status 4000000 86000000 21,5   6000000             price per share amount of shares value of investment average share price     21,5 4000000 86000000 21,5     2 4000000 8000000 2               Total extra invested investment status 8000000 94000000 11,75   14000000             price per share amount of shares value of investment average share price     11,75 8000000 94000000 11,75     2 8000000 16000000 2               Total extra invested investment status 16000000 110000000 6,875   30000000             price per share amount of shares value of investment average share price     6,875 16000000 110000000 6,875     2 16000000 32000000 2               Total extra invested investment status 32000000 142000000 4,4375   62000000             price per share amount of shares value of investment average share price     4,4375 32000000 142000000 4,4375     2 32000000 64000000 2   Total extra invested           126000000 investment status 64000000 206000000 3,21875    

 

This is still an incredibly high-risk option. But this does mean they do not write off R80 mil... 

 

All of this is still under the assumption that Mr. Alan Grey has the same view as @Investment Novice, meaning they believe the share price could/should be around R20 as share if restructuring occurs. This would also mean that they could recover all of their losses suffered since Dec.

 

Like I said this would be a very unlikely move... but then what's another R16 mil for one of the big boys, considering the possible reward(and not writing off R80 mil).

 

Any thoughts? 


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#10386 Investment novice

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Posted 09 May 2018 - 10:17 AM

They done it for quite a few investments if my memory serves me correctly....Supergroup comes to mind and that made them good money after it recovered. But lost on some donkey ones...Abil?? Aeg??

AG made money on all where they were confident based on their analysis. AG are successful because they get into a businesses operations, understand strategy and cashflow- not only look at financials and forecasts. I work in a top 40 listed company of which AG have a large chunk, and have increased their investment- having an AGH shareholder comes with lots of admin and face time. apart from understanding risk, one of their investment requirements is business sustainability? I am not at all assuming that they love SNH in that case they would have bought up 15%. but they have a position which if anyone has information on- please share.

also with the current fiasco they would not be able to justify a massive investment- this is more than a hedge or a gamble-

does anyone have any recent reputable analyst positions. SNH is still a hold


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Posted 09 May 2018 - 10:17 AM

They done it for quite a few investments if my memory serves me correctly....Supergroup comes to mind and that made them good money after it recovered. But lost on some donkey ones...Abil?? Aeg??

AG made money on all where they were confident based on their analysis. AG are successful because they get into a businesses operations, understand strategy and cashflow- not only look at financials and forecasts. I work in a top 40 listed company of which AG have a large chunk, and have increased their investment- having an AGH shareholder comes with lots of admin and face time. apart from understanding risk, one of their investment requirements is business sustainability? I am not at all assuming that they love SNH in that case they would have bought up 15%. but they have a position which if anyone has information on- please share.

also with the current fiasco they would not be able to justify a massive investment- this is more than a hedge or a gamble-

does anyone have any recent reputable analyst positions. SNH is still a hold


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#10388 Polly

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Posted 09 May 2018 - 10:07 AM

that's a plausible scenario- however they have governance and investment controls. not AG money but investors funds and therefore cannot gamble R1 even- even if a sure thing if not backed by an analysis and sound reasoning that can be defended

They done it for quite a few investments if my memory serves me correctly....Supergroup comes to mind and that made them good money after it recovered. But lost on some donkey ones...Abil?? Aeg??


Edited by Polly, 09 May 2018 - 10:08 AM.

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Posted 09 May 2018 - 10:05 AM

IN let me use arbitrary figures by way of an example how the big boys play this..

 

Assume AG has 1000000 shares in at R80.00    = R80000000 invested before the crash

now trading at R2.00

 

Pays them to take a big risk

 

Buy another 1000000 @R2.00                           = R2000000

 

they probably wrote off the R80m....whats another R2m  to reduce risk even it that R2m goes to zero. They just of the opinion that the R2m is good risk reward...Not investing because they see it as a recovery...

that's a plausible scenario- however they have governance and investment controls. not AG money but investors funds and therefore cannot gamble R1 even- even if a sure thing if not backed by an analysis and sound reasoning that can be defended


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#10390 Polly

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Posted 09 May 2018 - 09:31 AM

a lekkah afternoon braai also requires charcoal and fire.

 

time will tell....

 

"Steinhoff accounting boggles the mind....."

this is an interesting piece of journalism that points to the accounting irregularity of revaluation of shares that was previously valued at cost. the journalism finds some obscure ..or rather lets be kind....lets known investment analyst to comment on the validity of the transaction. why not seek the best in the industry to give you guidance. what does the head of Allan Gray investments think of this. The reality is that this massive transaction will be evaluated and repriced at maybe a lesser value but not zero and surely not R20billion.

this is legitimate corporate practice and had to be signed off by the board , Christo wiese; anumber of legal and banking experts; the FSB , JSEl Frankfurt etc.

is the entire world gullible...surely only the sheep that do not question the integrity of the information whether a beleaguered past shareholder or any current reader.

 

all I ask for is balanced informative journalism to give solice to past shareholders....sure I want to make a killing here too...lets get the truth, lets interrogate the information and if the truth is worse and burns Steinhoff then that's important too. but if there is more to meet the eye and the only objective is to sink the price so that the cannibals can get in cheap now...well then its important for us to also jump on the band wagon...let not your investment decisions be based on ignorance of lack of knowledge or fear...sure we don't know the facts---lets find out and interrogate and when we have more information at least we can then start to invest wisely....I am still waiting on more confirmation on the shareholder register...interestingly Citibank had been a buyer of debt were you aware and they now a buyer of shares...why would they play both sides of the fence...??could it be that they would support debt restructuring and settle on the revised terms, interest rates, equity and increased share valuation subsequently.....I a mere romantic dreaming about castles in the sky

 

IN let me use arbitrary figures by way of an example how the big boys play this..

 

Assume AG has 1000000 shares in at R80.00    = R80000000 invested before the crash

now trading at R2.00

 

Pays them to take a big risk

 

Buy another 1000000 @R2.00                           = R2000000

 

they probably wrote off the R80m....whats another R2m  to reduce risk even it that R2m goes to zero. They just of the opinion that the R2m is good risk reward...Not investing because they see it as a recovery...


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#10391 Investment novice

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Posted 09 May 2018 - 08:56 AM

Burn, burn, burned...

 

tesla.png

a lekkah afternoon braai also requires charcoal and fire.

 

time will tell....

 

"Steinhoff accounting boggles the mind....."

this is an interesting piece of journalism that points to the accounting irregularity of revaluation of shares that was previously valued at cost. the journalism finds some obscure ..or rather lets be kind....lets known investment analyst to comment on the validity of the transaction. why not seek the best in the industry to give you guidance. what does the head of Allan Gray investments think of this. The reality is that this massive transaction will be evaluated and repriced at maybe a lesser value but not zero and surely not R20billion.

this is legitimate corporate practice and had to be signed off by the board , Christo wiese; anumber of legal and banking experts; the FSB , JSEl Frankfurt etc.

is the entire world gullible...surely only the sheep that do not question the integrity of the information whether a beleaguered past shareholder or any current reader.

 

all I ask for is balanced informative journalism to give solice to past shareholders....sure I want to make a killing here too...lets get the truth, lets interrogate the information and if the truth is worse and burns Steinhoff then that's important too. but if there is more to meet the eye and the only objective is to sink the price so that the cannibals can get in cheap now...well then its important for us to also jump on the band wagon...let not your investment decisions be based on ignorance of lack of knowledge or fear...sure we don't know the facts---lets find out and interrogate and when we have more information at least we can then start to invest wisely....I am still waiting on more confirmation on the shareholder register...interestingly Citibank had been a buyer of debt were you aware and they now a buyer of shares...why would they play both sides of the fence...??could it be that they would support debt restructuring and settle on the revised terms, interest rates, equity and increased share valuation subsequently.....I a mere romantic dreaming about castles in the sky


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#10392 Snippit

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Posted 08 May 2018 - 08:40 PM

Burn, burn, burned...

 

tesla.png


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#10393 Investment novice

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Posted 08 May 2018 - 06:04 PM

Hehehheheh.

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#10394 Procrastinator

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Posted 08 May 2018 - 04:56 PM

I totally agree...It's very frustrating, but bad news just sells more newspapers than good news...something to be wary of...


Indeed, we must be wary of the negative dastardly press core !

Pity about the massive fraud perpetrated by Steinhoff senior staff, the resultant 95% collapse in value of the company and the almost 160 Billion rand debt pile to be serviced.
Lots of good news to report.
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Where did those damn 10 baggers go?

#10395 Dell

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Posted 08 May 2018 - 03:18 PM

I totally agree...It's very frustrating, but bad news just sells more newspapers than good news...something to be wary of...


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#10396 Investment novice

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Posted 08 May 2018 - 03:05 PM

Just seen the trading uodate fo tempur sealy. Their margins in excess of 40 %. This might be the reason their relationship with Steinhoff ended. SNH better able to extract effieciencies with the integrated approach. The downsizing and structural changes are positive.
Again my question. Should journalists not
Adequately investigate and report on both positivr and negative.


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#10397 Investment novice

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Posted 08 May 2018 - 10:25 AM

hi, has anyone reviewed the end of April shareholding to confirm movements and interest?


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#10398 Investment novice

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Posted 08 May 2018 - 10:24 AM

hi, has anyone reviewed the end of April shareholding to confirm movements and interest?


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#10399 Investment novice

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Posted 07 May 2018 - 03:34 PM

Polly thats good advice. I have cash accumulated for modeate and low risk an will invest fom there when certain levels are breached. I have liquadated my high isk and pumping at intervals into snh as we dont know where it will go. I will alo keep 100k fo a sudden buy if there is total collapse an sale at depseration at 30 cents...this ia part of the high risk....

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#10400 Polly

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Posted 07 May 2018 - 01:51 PM

lets look at a scenario analysis with given and assumed information- as you are quite right - we don't have all the facts

 

1. worse case- suspension- lots of shareholding, no recovery with a  stripped asset base- we will only have some winners VC and all others are losers- no legal liability for a bankrupt entity. I take this as a probable scenario but expect that there Is more money to be made with restructured debt, cheap equity and recovery.

 

2.  scenario 2- restructured debt, cheap equity and   legal settlement-  no dividends for 4 to 5 years- share price recovers to r7 following restructure. according to wiese we may have debt restructure; listing of SNH property portfolio and a HEAP of STAR assets....

 

3 scenario 3 - PWC report discloses all the holes- fantastic as we are at either scenario 1 or 2 or probably 3- scenario - market over- reaction- share R12 to R14 by December and climbing steadily to R30 end 2019 with settlement of claims

 

 

I have therefore a range from  R0 to R30 with a mid price at R7.00 to R12.00 R7 by end May if we have debt restructuring which I doubt as we need financials- but may get at least a grace period to ensure covenants are not breeched.

 

The share is currently at R1.90 with doomsday priced in...a penny stock.

 

In that case, as i waited for break of R5.00 to go short, and as Bullhunter said best time to buy is when prices are rising, i would if i were you, go in on break of R5.00 to upside and add more on break of R10.00. Otherwise you playing a very high risk game.

However seeing you already bought much higher and added lower, its time to pray and hope with sleepless nights.


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