African Battery Metals Share Discussion Threads

[johncraven] 02/10/2013 10:37

Think there is major upside at this mkp as c1d highlights the share price is well below net asset value and oversold.

[c1d] 02/10/2013 10:32

The current share price is well below net asset value (based on 31 Dec 12 balance sheet), so if the major shareholder bought the whole thing today they could make a tidy profit - assuming that they could turn it around.

[salpara111] 02/10/2013 10:18

I cant imagine that the major shareholder will simply flush their investment but what they can do is drive the share price down to pennies and then make an offer to take the company private.
I was almost going to put a short on here 2 days ago and now absolutely kicking myself!

[acquisitor] 02/10/2013 09:38

This has been heading for the grave since Robin Ashton joined the board. This is the man who was the kiss of death for London Scottish Bank.

[quepassa] 02/10/2013 09:35

In my opinion the share price has potentially a lot further to fall.

ALL IMO. DYOR.

QP

[moneybags] 02/10/2013 09:32

At 39p just now, the rights issue is out the window.

Shame, It used to be such a well run company.Got too greedy during the 'gold rush'
Just 5 to 10 years ago it was a quality share.

Aye, Moneybags

[bobsidian] 02/10/2013 08:45

Gold accounted for up to 2/3 of its operating profits. With a much reduced contribution from that stream of revenue, the ability of ABM to manage its on and off balance sheet debt has probably come into focus.

The hardening in the attitude of its lenders has no doubt conspired to reveal just how high fixed costs are relative to total costs. And as the tide of its revenue stream recedes so the threat to its core business has probably been revealed.

It is the old story of a business scaling up on the back of an exceptional income stream only to become reliant on that exceptional income stream to manage its debt burden.

ABM will probably have to reclassify more, if not all, of its debt as current rather than long term. And the wording of the going concern note may have to be changed to reflect the heightened risk to its viability.

[taylor20] 02/10/2013 08:17

I guess EZCorp have their own agenda. I would not be surprised to see them making a move in 6 months time.

Why did they announce the exact figure of the potential rights issue in the first statement? Seems bizarre.

How has the situation deteriorated so fast that they now need a £35m cash injection?

I was confident that HAT had no problems of this nature, but not so sure now!

[bobsidian] 02/10/2013 08:04

Yes, but Supply/Demand fundamentals for gold are heavily skewed toward the East. The paper gold market of the West is bullying the real gold market in the East.

But ABM are not a world player. It looks as though it has long exhausted the supply of cheap gold which gave an exponential boost to earnings. Now the management seem left with the painful and expensive task of downsizing which could test the patience of its financiers.

[edmondj] 02/10/2013 07:50

How the situation has changed, since all the 'gold parties' (trade in your jewellery etc) now the sign of a top. EXCorp in a painful situation, implicitly of not wanting to throw good money after bad. They don't even seem convinced, management has a credible long-term strategy.

[bobsidian] 02/10/2013 07:35

A bit of a shocker of an announcement.

If the major shareholder has no faith in ABM then that leaves distinctly fewer options for management.

A further share price crash today no doubt.

[ammons] 02/10/2013 07:15

Well EZCorp have walked away so what now?



Another 50% fall today I think.

[bobsidian] 01/10/2013 22:53

Probably because there is a perception that EZCorp may make a move to offer guarantees to the ABM lenders which could allow for a variation in the financial covenants whilst avoiding the need for a rights issue. This may be a cheaper alternative to EZCorp than subscribing for additional shares.

However, if EZCorp do agree to participate in a rights issue then it would not be surprising to see the share price move down to the 50p level. Doubtless the proceeds of any rights issue would be consumed by ABM in scaling down its business to accord with its new reality. And if this is indeed the case then it would not be surprising to see the 2012/13 and 2013/14 financial results of ABM being littered with write downs and write offs.

[quepassa] 01/10/2013 10:40

I ask myself how long before the price may or may not trade down to the price of the potential Rights Issue price of 50p?

If they are contemplating selling/issuing new equity at 50p, I ask myself why is the old equity still at 70p?

ALL IMO. DYOR.

QP

[marksp2011] 30/9/2013 16:47

Interesting

The Pawn Brokers in the local shopping centre have windows full of gold 1/2 and 1oz bars. I guess if you bought those in at a 20% discount expecting to sell at market + commission the fall in the Gold Price will have been very painful

Another thing......just how much broken gold jewellery in the back of drawers is there? It can't be an infinite amount

Remarkably balanced trades considering the news

[spob] 30/9/2013 08:26

if they're on the verge of breeching covenants, there will be no dividend


you can't tap shareholders with one hand, via a rights issue

and then give it back to them with the other hand, via dividends


makes no sense, would be stoopid

they have to sort out the debts



this is why i steer well clear of companies with too much debt, because sooner or later they trip up, and then shareholders get diluted out of existance.

some shareholders never learn from their mistakes

[still waiting] 30/9/2013 08:24

looks like another high street failure, too many stores not enough turnover.

R.I.P

[knocknock] 30/9/2013 07:32

Indeed. Afraid this might get slaughtered in the rush to exit.

[ammons] 30/9/2013 07:29

Jeepers!!



What a poor update.