Ls -1x Mu Discussion Threads

[adp] 16/7/2004 13:36

Personally Id take you profit and be happy, a win is a win

[garysmith7] 16/7/2004 13:03

boppo, I agree with this view so advise you to hold.


Master RSI - 6 Jul'04 - 11:20 - 354 of 376


From.....SHARES STRONGLY UP this week 05/07/04 (UPS)

Master RSI - 6 Jul'04 - 11:16 - 142 of 144 edit
MUST 18.5-19.5p +2.25p

Some confusion about the future of the company and the proper valuation, here is how I see it:

Example of a round figure 10,000 shares of any shareholder
A reduction of 73%, one will end with 2700 shares PLUS 16.75p cash.

I reach the conclution that the Directors are not happy with the Market valuation of the company and decided, at they can get a better valuation returning the cash to the shareholders.

Yesterday valuation of the company was £0.750M yes £0.750M

WHY ? Because the Market cap was £20.55M - cash in bank £19.80M = 0.750M

With 122.1M shares on the Market at the moment the 73% reduction on exchange for cash will mean only 33M shares on the Market

So there is a Company with Sales of £9.6m + (£19-8M-£15M) 4.8M cash, sure that is worth at leat £15M

So my valuation of the company comes to 45.5p after the reduction. (£15M/33M shares)

Now is 16.75p cash plus maybe and extra 45.5p on the reduction

[boppo] 16/7/2004 09:39

Please would someone advise me on what I should do. I hold 5000 Music Choice shares If I sold them all now I would be in profit by about £40.Since I do not know the ins and outs of the buy back process I feel that I might be missing out on something here. If they take my 73% away at 16.75p that would be less than the price I paid for them.

[typo56] 11/7/2004 14:04

Yes, I would expect the post buyback price to be higher to reflect the change. To be neutral the post buyback price would be:-

(Pre buyback price - 0.73 * 16.75) / 0.27

In other words if the pre buyback price is 18p you could expect the post buyback price to be about 21.4p.

That assumes I'm not wrong...which is one hell of an assumption!

[gripfit] 11/7/2004 11:38

bodes well for next week ,i can smell 25p soon.

[zinco] 11/7/2004 09:39

MAIL ON SUNDAY;

SECRET DEALINGS:

MUSIC CHOICE GET'S TOP FUND MANAGERS' VOTE:

Digital music group music chioce europe has created air guitar aerobics as a keep-fit fad for music fans-and some investors hope for healthy returns from the company after building secret stakes.
The company,worth £22.3 at last week's closing price 18.25p,provides non-stop music packages through digital television and broadband internet.
It has yet to make a profit,but last year it halved operating losses to £4.2m,increased margins and reduced costs.It expects to break even on an ebitda (earnings before interest,tax,depreciation and amortisation)basis for the first quater f this year.
It also has £19.8m of cash and plans to return £15m of this to shareholders thriugh a share buy-back.
AAA-rated fund manager Mark slater has been buying the shares for his two unit trusts and a privae investment vehicle.He added to the MFM bowland and slater recovery funds'stakes in mid-june.Between them they control 3.13 per cent.
AAA-rated giles hargreave holds four million shares,or 3.25 per cent in the marlborough special situations fund.

source: CITYWIRE.CO.UK

[devbod] 09/7/2004 10:10

> Balance : 2700 shares, cost £877.25 = 32.5p each = loss per share of 11.5p so far

You are calculating the 11.5p loss based on the current pre-buyback share price. In theory the post buyback share price will move higher overnight to reflect the change.

[adp] 09/7/2004 09:35

I know a lot, i used to work there, allegedly but then Id get in trouble if I talked - wouldnt i??

[tightfist] 08/7/2004 23:10

Steady on folks. If I had bought in at a much higher price I would also be miffed, but let's take a look at what lies ahead.

By my maths, at tonight's price we would have a market cap of £6.1m when 73% of the equity is retired. Taking account of around £4.8m remaining cash, that is an enterprise value of £1.3m, and an enterprise value/sales ratio of 0.14, for a company that is EBITDA breakeven, with longterm contract revenue visibility, a 46% gross margin, and a growth message.

There are many people on this board who know a lot more than me about this outfit, but this looks pretty attractive to me. The PTS experience colours my judgement - biggest problem right now is the large temporary cash outlay required (and stamp duty) to get a meaningful holding after the Reduction of Capital. And yes, they will be very tightly held/illiquid?.

Cheers, tightfist

[adp] 08/7/2004 15:39

Just sold ALL mine at a small loss, I figure better out than in (only lost 20quid ish all in!) tw4ts, I was hoping to make a small proffit at least

[greengiant] 08/7/2004 14:47

Good trading nap.

gg

[napoleon 14th] 08/7/2004 14:45

gg - no time for a lie down...............
Yes, I chose to buy @ 21p. No probs there. Bought mainly on TA, not the service.
Don't like their way of doing biz. OUT! See ya elsewhere, mate....

[greengiant] 08/7/2004 12:55

Nap - Have a lie down. Simple fact is you are now better off than prior to the announcement. (£50.75 if you take it up or £188 if you sell now). It is not the company's fault that you bought too high.

gg

[napoleon 14th] 08/7/2004 12:42

I dislike this murky/nebulous buy-back scheme intensely.

45p? LOL!!!

Others, like BVM, are equally, if not more, undervalued.
They do things in a rational way by buying in the market.
What MUS are doing is paying less than market price, a fact underlined by the rise in share price since, as if a conventional buyback had been done.

Reality is, for example:

10000 bought for (in my case) £2100 cost.

Redemption of 7300 @ 16.75p = £1222.75p cash.

Balance : 2700 shares, cost £877.25 = 32.5p each = loss per share of 11.5p so far, = £310.50 B4 costs.

ALTERNATIVE : SELL! 10000 @ 18.63p = £1863 : loss £237 B4 costs.

Any reason for putting up with this?

Prospects!!! Ah, well, seeing is believing, and the record says MUS has been a "road of borrocks" so far......floated at 164p, and so now they give you back 10% of that 'cos they have too much cash???

GERTCHA! I'M OUT OF THIS GAZUMPER...............

[mr potato head] 08/7/2004 12:24

Niggle I think you're right...must have had me beer goggles on :) ...still sounds as good as ever though !

[niggle] 08/7/2004 12:15

Mash Mash, yes yours eyesight has got worse, or you have lowered your standards with age mate!, last time I saw her she had a bigger beer gut that me! lol

:O)

[mr potato head] 08/7/2004 10:58

Another great night out last night ...went to see Debbie Harry and Blondie play live in a big tent in our local park ...great music and incredibly she looks almost as good as she did 25 years ago ..or has my eyesight got worse !
they're on tour now if you get a chance to see them I can thoroughly recommend it .

[devbod] 07/7/2004 10:32

Certainly the share price is likely to be more volatile with the reduced share count and such a large amount of cash dissappearing from the books.

If this is an expression of confidence by management then great and this share could go nuts. If the small number of important shareholders (from ownership and trading POV) simply demanded the cash back then their reduced commitment to the company would be a concern.

Fingers crossed for you, still mulling the decision whether to buy back in or not ;)

Mike

[lom2] 07/7/2004 07:31

shud xplode

[tightfist] 06/7/2004 22:31

DevBod,

Take a look at Patsystems for a (great!) example of how this can develop. On Oct 8th 2002 they announced a cashback which finalised at 70% of the previous night's close. On the 8th the price closed up 15.1% - take a look at what happened over the next 14 months, and maybe what remains in store.

Today the corresponding figures for MUS are 73% and 14.9% - looks familiar!

This seems to me to be a great vote of confidence to me - and the directors cannot squander the cash either. And yes, I was buying today.

Cheers, tightfist

[jimbill] 06/7/2004 14:37

"So my valuation of the company comes to 45.5p after the reduction. (£15M/33M shares)

Now is 16.75p cash plus maybe and extra 45.5p on the reduction"

So presumably that valuation equates to about 29p in todays unconsolidated shareprice!!

[devbod] 06/7/2004 14:31

This enforced 73% buy back makes for interesting math on the share value. If you buy 100 shares now at 19.5p it costs you £19.50. You are forced to sell 73 at some future date for 16.75p returning £12.23 (£12.2275 to be precise). So effectively a purchase now of 100 shares effectively results in ownership of 27 shares at a price of (1950-1222.75)/27 = 26.94p a share.

Whether or not the management had any productive use for the cash, the return of funds has presumably been 'requested' by the major shareholders. I'm curious as to why todays news has produced the leap it has.

Mike