Alea Share Discussion Threads

[paddyfool] 06/12/2005 07:28

and the bad news over rating arrives......looking good now for a big fall as this should be the death knell of ALL continuing business.

If there was a clear arguable surplus/ net cash of 110p per share, with the remaining businesses then they would not be looking to sell renewal rights they would be either selling the company or trading on. They have now clearly signalled that they do not have this.

[paddyfool] 05/12/2005 23:04

The best case is unlikely as it needs complete divestment to a run-off company of the run-off. But it could happen, and......even if it does it may well then entail a massively discounted capital raising.........remember where you heard that first. dyor etc

[effortless cool] 05/12/2005 21:49

Best case? The remaining US businesses prove viable and trade on profitably; reserves throughout prove adequate. Consequently valued at a small premium to NTA, say 160p per share.

This outcome seems unlikely but is not impossible. Fortunately for shorters, it won't reach this position quickly and there should be plenty of clues along the way.

[handycam] 05/12/2005 21:18

You cannot be bought in on a suspended stock. And forget the views of your broker. As a general rule 'tis he who is dim.

[effortless cool] 05/12/2005 19:55

Shanksaj,

Short positions can only be closed if there is a market that allows the betting company to buy the shares. If you try and buy at a level well above the normal market size, you may find that you get a disadvantageous price or only part of your bet closed.

EC

[shanksaj] 05/12/2005 19:17

Handycam,

If you are talking about dealing in the shares themselves then I understand you, but I don't have a dealer that will allow me, and I wouldn't do it even if they did allow it. (For a start, I haven't a clue whether a dim view would be taken by a broker, and what action they would require of you, if the shares are suspended and you haven't yet bought back.)

If you are talking about taking out a short spread bet position, then you have lost me completely, because, as I understand it, spread bet positions can always be closed. Please explain.

Just in case M.T.Glass's question gets overlooked here it is again:

"Even for the most convinced shorter, it is good practice to imagine the very best of the positive rescue scenarios that could concievably apply. Anyone care to?"

[handycam] 05/12/2005 17:52

A more pertinent question with any bear trade is: 'Is the market liquid?' For if it is not, then one cannot have a reasonable bet size, since with this particular company the offers are in 2500 shares.

If one can sell the shares but can't get them back, then one shouldn't sell.

So Shanks, if you declare your hand you encourage the market to turn the screw and your float (variation margin) evaporates before the anticipated fall. You may have sold 80000 shares but you cannot square them. That, my friend, is the pitfall to avoid.

Yours etc.,

[m.t.glass] 05/12/2005 16:34

Even for the most convinced shorter, it is good practice to imagine the very best of the positive rescue scenarios that could concievably apply. Anyone care to?
(Added to my short again)

[shanksaj] 05/12/2005 16:30

TIGREBONE,

The two experts on this thread are Paddyfool and Effortless Cool. Effortless Cool gave a more cautious view a few days ago. If you are thinking of shorting a good question to be asking in my view is: Is there any upside for the shares at this level? As for me, I cannot see that the risk of it going up is comparable to the risk of it going down.

[tombarr] 05/12/2005 16:14

PF, thanks very much.

[paddyfool] 05/12/2005 16:00

Tom if I knew the absolute answer to that question I would not be posting here! However do some research and find a company going into run-off which releases large value to its shareholders/owners. If you find one post it here! If you find those which have done the same and been worth next to nothing....post them here. One list will be long and one very short. As an indication Sphere Drake/Odyssey re went into run-off in 1997/8 it has cost its parent in excess of £450 million since then and its still getting worse. It was a very similar scenario to this lot. If you dont understand this stuff do not invest.

[tombarr] 05/12/2005 14:23

Paddyfool, a bit of a cheek but I was wondering if you had a public view now on what value might be left once everything is boxed off?

Numis are clearly looking at 95p but I assume that you consider it's a lot worse than this, i.e. a Goshawk? Any thoughts you or others may have would be much appreciated as I have scant knowledge of the insurance market apart from "when it goes wrong, it goes spectacularly wrong".

Will there be any value left for shareholders at all come February?

[tigrebone] 05/12/2005 14:23

stock is currently valued at $300m. Am i missing something here- if they find buyers for all their remaining business these payments will be performance related and will be capped. surely best case scenario is a cash present value masses below current cap?

[adeyberry] 05/12/2005 12:33

Try other ALEA bb!

[harleymaxwell] 05/12/2005 12:21

what does this mean for share price???

[paddyfool] 05/12/2005 07:53

Unbelievable but it happened! Someone paid fpr 'renewal rights' in a subscription market. Anyone with half a brain would know that the key player for a renewal willl be the Broker. Doesnt Canopious know there is next to no value in these? Pretty telling that a privately held company only bought them.

Back to Alea....well there is not much left now and the writing is firmly on the wall. Expect more bad news and soon from the ratings agency. pretty telling that the 2004 book of $222 nillion made $14 million before expences and RI....Which means in real terms it made a whopping loss...the 2005 account of course will be absolute carnage.

[paddyfool] 01/12/2005 08:02

sorry about that just talking about jobs offline!

[m.t.glass] 30/11/2005 22:54

AD, - I hear rumours that EC & PF are secretly preparing a bid for any remaining good bits of ALEA ;o)

I'm still short too, by the way.

I wouldn't leave your email address showing too long EC - they are mercilessly harvested at times and sold on.

[adeyberry] 30/11/2005 22:48

Come on lads, keep your views on this bb please!

[paddyfool] 30/11/2005 22:03

Effortless do you hav a discreet email address?

[effortless cool] 30/11/2005 20:33

Paddy - yes.

[adeyberry] 30/11/2005 19:24

Same here, no pain, no gain!!

[paddyfool] 30/11/2005 18:38

I still am short and will remain so. The story is till the same.