Jsjs Designs Share Discussion Threads

[alynch] 12/3/2014 09:37

Neubie try [e-mail]

A lot of good reasoning on here...you guys make a helluva a lot more sense than JSJS explanation!

[greenrichard] 12/3/2014 08:40

Some really great posts over the last couple of days. My strategy is to look for another entry point if the share price continues to fall prior to AGM and use my SIPP to hold until the company is sold - as I agree that this is the true reason behind the proposed consolidation.

[restriction] 12/3/2014 08:33

You've hit the nail on the head buggy.

Also has anyone noticed Drol spelled backwards? (trivial enlightenment)

[buggy] 12/3/2014 08:27

The strategy becomes clearer once people remember that Mike Lord has a company to run and that company is Drol investment. He is managing JSJS Design as a means of looking after their investments in the JSJS designs. [Mike's involvement with JSJS design is only because Drol are invested here. Once Drol sells up then Mike will move on to possibly manage other companies in which Drol are invested, where they think that the company could benefit by the management expertise provided by Drol]

Drol investments are venture capitalists and they will need to exits their investments at some stage.

What Drol invested in JSJS design is only a small fraction of their whole investment portfolio and Mike's key priority is to protect and safeguard the investment made by Drol into JSS design.

In a lot of ways PI interest and Drol interest are aligned: they both want the share price to go up. Where they differ is in exit strategy, PI wants liquidity to sell into the market. With the size their holding, over 70 million shares, Drol needs a trade sale as they can't very well sell 70million shares into the market.

All in all I will stay invested as I feel I can afford to park my investment here until the end game. Share price must go up for Drol to exit.. whether this year or next or whenever.

[neubie2u] 12/3/2014 08:19

Whoppy....I too sent an e mail to the company to their general e mail address. If you have MLs mail address could you post it? Thanks.

Buggy...if you are correct then the exit strategy will be or rather should I say will expected/hoped to be at multiples of the share price post consolidation...

When I first invested here I had expected a buy out at some point I just hadn`t expected that the smaller shareholder would be forced out. The explanation given by the company really does not justify the consolidation for the smaller shareholder whose definifion is never given...small shareholder = a PI with less than 1 mill? Less than 500,000? Less than ????

Hmmm. Still in a quandry.

[buggy] 12/3/2014 07:58

Whoppy,

I believe that your statement may actually be the answer:

Do management want to take this private because they know the company is onto a good thing?..

I believe that they are preparing the company for a trade sale.

Lets not forget Mike Lords background... he is a venture capitalist and needs an exit strategy. They have a business which invests in company's that they feel they could help grow.[ Drol Investments : hxxp://www.drolinvestments.com/]



Their intent is not to own the company for ever but to grow the business and exist with profit. [The investment into JSJS is by Drol investment which Mike Lord is the chairman]

In Minivator where Mike Lord made his name: they helped a management buy out.. he grew the company and then sold the company out to a larger operator.

The 11 Mil shares definitely gets rid of the small investors, the shares will be illiquid so in effect this will be almost like a private company as you can hardly buy or sell. Management will be controlling more than 50% of the company so the shares available to buy or sell limited.


We know Mike is good at his job, so I suppose the question is if you want to keep hold of a private company until the exit strategy .. then it is good to keep your shares. But if you think that you will need the money invested here soon or if the flexibility to be able to buy and sell as and when you wish is important to you ... then look elsewhere.

This share will be seriously illiquid , 11Mill outstanding shares for an AIM stock is far to low to encourage liquidity especially where management controls over 50% of the outstanding shares. [This extent of consolidation will in effect make the company into a pseudo private company]


below is the key mission statement for Drol Investment:

Drol Investments was created to fulfil a gap in the SME sector for businesses who are looking for investment, but also support and advice/guidance when developing their businesses

Hence somewhere along the line they have to have an exit strategy and the best exist strategy for them with regards to JSJS is a trade sale. Trade sale will be better served if there were only a very small number of shares... anyway that is my interpretation.

Nothing has changed with regards to prospect of the company.... what has changed is that you need to be prepared to sit tight until the exit strategy as trading on shares will be difficult with only a small number of shares available.

[alynch] 12/3/2014 07:56

My answer from ML did not tell me anything. Stupidly I put too much of my own commentry in it, and he pointed out that I answered my own question, which was partly true. However, I am writing back, as I would like some sort of reasoning that makes sense to me from him.

I'm going to attend the AGM to vote if I can get away from work. Trouble is, I've bought my shares through TD Direct, and they tell me that I can't get company information etc through them. How do you get to vote if you don't have a bit of paper to say so? Do you just turn up and they have your name? or do you have to get the paperwork from somewhere?

Cheers in advance

[neubie2u] 11/3/2014 23:30

maximum dilution to be 281,000 pounds = number of shares x share price at time of issuing this coming year? Res 6/7 though 7a makes for interesting...and for me anyway confusing reading...anyone?

Resolution 6
THAT the Directors be and are hereby generally and unconditionally authorised for the purposes of section 551
of the Companies Act 2006 (Act) to exercise all the powers of the Company to allot shares in the Company or
grant rights to subscribe for or to convert any security into shares in the Company (Rights) up to an aggregate
nominal amount equal to £181,590, provided that this authority shall expire on the date of the next annual
general meeting of the Company following the passing of this resolution, save that the Company may before
such expiry make an offer or agreement which would or might require shares to be allotted or Rights to be
granted after such expiry and the Directors may allot shares or grant Rights in pursuance of such an offer or
agreement as if the authority conferred hereby had not expired.
(Ordinary Resolution)
This authority shall be in substitution for and shall replace any existing authority pursuant to section 551 of the
Act to the extent not utilised at the date this resolution is passed.
Resolution 7
That, subject to and conditional upon the passing of Resolution 6, the Directors be and are hereby generally
authorised pursuant to section 570 of the Act to allot equity securities (as defined in section 560 of the Act) for cash
for the duration of this authority as if section 561(1) of the Act did not apply to any such allotment PROVIDED
THAT such power shall be limited to:
(a) the allotment of equity securities in connection with a rights issue, open offer or any other preemptive
offer in favour of holders of equity securities (as required by the rights of those securities )
in proportion (as nearly as may be) to their respective holdings, subject to such exclusions or other
arrangements as the Directors may deem necessary or expedient in relation to treasury shares,
fractional entitlements, record dates, legal or practical difficulties in or under the laws of any
territory or the requirements of any regulatory body or stock exchange; and
(b) the allotment (otherwise than pursuant to sub-paragraph (a) above) of equity securities up to an
aggregate nominal amount of £100,000, being approximately 18 per cent of the Company's issued
share capital following the Consolidation.
and the power hereby conferred shall operate in substitution for and to the exclusion of any previous power
given to the Directors pursuant section 570 of the Act and shall expire on the date of the annual general
meeting of the Company following the date of the passing of this resolution

[whoppy] 11/3/2014 23:19

Thanks neubie2u..I have sent an email to ML saying I will be voting no unless he can give me a reason to vote yes other than what is in the circular..I will see what reply I get.

Surprised they're not holding the AGM on April 1st...it would seem more appropriate.

[neubie2u] 11/3/2014 23:16

whoppy capital TT makes it possible to click on the link as above...hopefully :^)

[rally] 11/3/2014 22:50

Has John S still got a reasonable number of shares, very odd that his initials are removed from the company name on the day he leaves the board. He has been diluted beyond belief. What is the point in him still being involved? Any more find raising will see the founders stake diluted even more if that's possible, the losses are huge and Maplins is up for sale plus more creditable companies are bringing better products to the market. You've done well with the recent unsubstantiated rise in share price I would be thankful of that ...

[whoppy] 11/3/2014 21:58

neubie2u,

I might email ML aswell. I am surprised at the consolidation particularly as ML has invested his own money.. but it could be that this consolidation benefits the BOD more with regard to what they want to do with the company rather than the private investor. 5/1 or 10/1 maybe okay but 50!! is taking the Michael and the explanation doesn't cut it..imo. Appreciate any feedback you get. I'll post something if I get a response.

[neubie2u] 11/3/2014 21:46

whoppy surprisingly voting no can be effective. You might have to set up a shareholders group to achieve the numbers you need though. Anyone who feels the BODs has made a mess of the ratio....I think 5/1 would have been much more acceptable...should e mail the company and let their feelings be known. The explanation given...thank you whopy...doesn`t seem to make any sense unless they already have IIs in the background looking to invest.

Will be e-mailing in the morning.

[whoppy] 11/3/2014 21:33

Do management want to take this private because they know the company is onto a good thing?..just when it looks like the company is about to start fulfilling the big potential shareholders have been waiting for, the BOD go and pull a stunt that is destroying value day by day. Are they wanting rid of existing shareholders? Their explanation in the circular makes no sense. Surely they are not stupid. What's it all about ML? Will the company stay silent as 10-15% gets wiped off every day until the AGM? Are the BOD happy at the share price reaction? and will they be happy with a post consolidation share price of less than 20p and an illiquid stock that will whither away to less than 10p because management will be sitting on most of the shares with very little volume traded that will enable the market to gauge demand and hence a true valuation, but instead a static boring share price for months on end. Great lesson on how to alienate current shareholders and put off potential new investors..I think I shall be voting NO, not that it will make much difference. And did you see the way the RNS was worded..jeez my grammar is not perfect but their's is terrible. Doesn't anybody proof read RNS's before announcing them?.. Really bad..if they wrote a letter to me applying for a job with that grammar, it would go straight in the bin!

[barrieb] 11/3/2014 20:54

Not only will this move make this share VERY ILLIQUID but it will make the share MUCH MORE VOLATILE!!!

What ever possesses the BOD to do this kind of thing is really beyond the realms of sensible thinking and makes me think who is giving them this kind of advise and what kind of BOD are they to be taken in by this ridiculous 50/1 consolidation.

This action will really depress the share price and it will take forever to recover from this unless they can pull multiple rabbits out of the hat to restore confidence!

I am very fortunate to not be a holder but have been watching from the side lines awaiting an opportunity to take an initial position if good progress continues.

However now I am very concerned about the level of business aptitude this BOD of directors have as a 5/1 consolidation would have been more suitable and it would have given a more sensible share price for a company of this size and at this stage.

Is this a clear signal that the board are not in touch with reality and they have got to big for their boots and don't give a toss for the private investor!

I call on the board to reconsider this action while they can still do so before the damage is done. It is your duty to look after the share holders of your company rather than treat them with complete disregard as your arguments for this consolidation do not stand up to reality!

I will continue to watch this and fully expect to see an share price between 20 to 25p when I will reconsider my position if it looks as though a recovery will be possible!!

Good luck to you all

AIMHO

[roomove] 11/3/2014 19:27

Sorry I can't agree. Illiquid stocks are generally not good news for pi's. 11m is also possibly about as illiquid as you get on aim. What tends to happen is when you try to sell you can't get a quote online so you have to phone and then find you are offered well below market price and the small sells cause a large drop in share price You could say the opposite happens when buying but in reality no institutions want in because they won't be able to sell quantity and pi's looking to buy find they have to pay over the bid so are put off. I've seen it happen several times and rarely are illiquid stocks a good buy.

[yesrupnel] 11/3/2014 17:13

I am not sure if there is any need at all for anyones concerns.

Whether a share is priced at 10p or 1p or whether you have 100,00o shares or 1,000,000 will have little or no effect. Obviously if a share reaches something like £1000 then dividing it up into £100 shares will improve a few small buyers ability to buy/sell/top-up but any signicant buy/sell/top-up by anybody other than a very small PI it will have no effect.

If it changes it from 110 million shares in circulation to 11 million shares does not effect anything. It the amount of money you want to invest/sell that matters.

If you thing there are not enough shares in ciculation now then nothing changes if there is 10 times less as again its all about the value of your transaction that matters.

If the company needs more money via a placing then they need more money via a placing. This share price adjustment will not alter anything.

The chances that they need more money via a placing has in fact substantially reduced (nothing to do with the share price adjustment) because the distributer now handles the orders, stock, warehousing and frees up money for R&D.

They now have contract staff to use when they need them for R&D and project management which ensure lower annual costs and professionals who can actually do the job.

They have got rid of staff in warehousing, merchandising etc.

They have invested in IT and don't need to invest more for a few years.

So with MUCH higher sales and reduced overheads they will have more profits for R&D.

So in summary I think any concerns about the share price adjustment is a red herring.

The need for a further placing is reduced (you cannot exclude it completely as it is a very young company expanding rapidly) due to the organisational changes annouced.

[whoppy] 11/3/2014 17:05

Buggy,

Yes, I completely agree. They need to clarify what the BOD'S intentions are with regard to the consolidation. It will achieve nothing of what they say it will in the circular. Very poor imo. The share price will continue to tank until they issue a further statement.

[buggy] 11/3/2014 16:06

Whoppy,

Somehow I do not agree with the reasoning , but there you go they have differet ideas.

1. Less shares improves liquidity??? [500M to 11 Mill shares and that will improve liquidity?]

2. Small holders find it uneconomic to trade? They did find it economic to buy their small share holding in the first place so what makes it now uneconomic to sell?

3. Administrative overheads?
May have been true in the days when all shareholders are in a company register.... the days of share certificates, Cost of maintaining the share register, cost of issuing share certificates. These days most share holders hold via a nominee account... hence no administrative burden in maintaining a share register. Hands up anybody that still have shares in a certificated form. Maybe what he meant is the number of people contacting them asking for updates which they are obliged out of courtesy to reply. With less share holding they would not have to deal with a barrage of PI enquiry anytime the share price loses or gains 0.1p. Institutional Investors are less of a hassle.

4. It appears the real reason is to raise capital and the rest is just waffle to justify the consolidation. It would have been best to just say that we need to consolidate as it will make us more attractive to institutional investors via placing. [With 11 Millions shares there is not enough for institutional investors to buy in the open market so either some of the directors will look to partial exit, via selling their shares to institutional investors, or a placing involving institutional investors.] Best to state the basic fact without waffle as that treats the PI as if they can't think.

[whoppy] 11/3/2014 15:42

From the circular sent to sharholders:

3. Background to and reasons for the Consolidation

The Company currently has in issue 547,773,768 Ordinary Shares. The Directors are conscious that Shareholders with small numbers of Ordinary Shares may find it uneconomic to trade them and, should the Company be in a position to pay dividends, it can be impracticable to pay dividends to holders of small numbers of Ordinary Shares. In addition, such a large number of Ordinary Shares in issue places an administrative and cost burden on the Company which is disproportionate for a company the size of JSJS. The Consolidation may also help to make the New Ordinary Shares more attractive to investors, enhancing the ability of the Company to raise new equity, and may result in a narrowing of the bid/offer spread at which prices are quoted for trading the New Ordinary Shares on AIM, thereby improving liquidity.

The Directors therefore consider that it is in the best interests of the Company's long term development as a public quoted company and for Shareholders as a whole for there to be a more practicable number of New Ordinary Shares in issue.
The Consolidation is subject to Shareholders' approval of Resolution 5 at the Annual General Meeting, notice of which is set out at the end of this Document.

hxxp://jsjsdesigns.com/publications/March2014Announcement.pdf

[roomove] 11/3/2014 15:31

Thing is with 11 million shares you could find selling almost impossible and this may be why some are selling now. SKHG is a stock with many similarities and I know how difficult that has been to buy and sell. One thing for sure it will stop any buys of any size as stock simply won't be available. Obviously directors holding is a comfort but they can have different priorities to a pi.

[alynch] 11/3/2014 15:21

Buggy...last placing, shares went down to half the placing price...then drifted down even more! But I suspect their current position should help prevent that now. I hope. Hopefully, though, they won't need to do a placing, with the sales they're now getting. 11 million shares...crazy small number!

[neubie2u] 11/3/2014 14:08

buggy...agreed.

Clarification on the reasons for the level of consolidation required but unlikely to be forthcoming.

[buggy] 11/3/2014 14:00

neubie2u,

Market is you and me.. at the moment small holders are bailing and there are more shares for sale than being bought so mm will not be keen on taking the stock off your hands.

Besides with the uncertainty regarding consolidation.. I do not think may will be filling their boots until the intent is clear.

If there is going to be a share issue.. you do not want to buy at 0.9 only for shares to be issued at 0.6p. Las placing a case in point. The price will usually drift to match the placing price.

Market does not like uncertainty and there is not enough information to make a call if this is a run for the hills till after consolidation, Hold or opportunity to top up.

In the absence of any other information I am holding.

[neubie2u] 11/3/2014 13:55

Have just done a couple of dummy sells for 100,000, 150,000, 200,000 and the best price actually the only price I got was .75.

Market NOT impressed.