Not much we can do anymore. I agree the issue was and is shareholder alignment and related party transactions. |
And there you go... |
 I don't think the market thinks it's a scam. However, as you infer, a share price of 4p compared to NAV/share of 15p does look ridiculous. The problem is, I think, that with the Rialas brothers owning over 70% they have been able to carry out a series of related party transactions which have decimated NAV. As a result ARGO is now owed $11m by Novi Biznes Poglyady LLC (100% owned by Andreas Rialas) and $12m by Argo Real Estate Limited Partnership "ARE LP", (100% owned by Andreas Rialas). All of these are fully provided for and account for 48p/share. I'm sure the Rialas's would claim that the losses are a consequence of the war in the Ukraine, since the 'investments' relate to the Riviera Shopping City ("RSC") - an 85,000 sqm retail park in Odessa, Ukraine. However the bottom line is that the market doesn't trust in whose interest the company is being run.
My holding is relatively trivial but I won't be buying more. Maybe one day the war will end and maybe the shares will go back to the 26p they tendered for them coming up 6 years ago...Maybe |
Hello Stemis, looks like there is nobody else out there. I was checking Argo results and they look ok at least NAV is good and increased. Do the market thinks this is a scam? Because the stock price is awfull..... I bought and sold into a tender a long time ago and then rebought and I am down like 75% in the second purchase. For the moment i am not buying more.... |
Decent set of results under the circumstances. |
Looks like I'm the only one still following ARGO.
This must be the deepest value play on the stock market, although for good reason. NAV/share - 39.5p, share price - 7.5p. The company also carries a provision against fees from ARE LP of 26.9p/share. So a potential 9 bagger from here. Well....
28.2p of the NAV/share is tied up in a loan to Novi Biznes Poglyady LLC, an entity that is 100% ultimately owned by Andreas Rialas (one of the Rialas brothers who have a 71.2% stake in ARGO). Novi Biznes Poglyady LLC ("NBP") is an asset holding company in Ukraine which directly controls a retail shopping centre in Odessa, Ukraine. The auditors included a qualification in their last audit report due to their inability to obtain an independent fair value of the underlying collateral for the loan.
The best that can be said about ARGO is that it appears to be financially stable. The share price is covered by cash and their shares in the ARGO Fund (in total 11.4p/share). Interim results were marginally better than breakeven. Until the situation in the Ukraine is resolved, hard to see it making any progress. Can't remember the last time there was even a share trade. Downside is dominant shareholders and level of related party transactions. Shouldn't really be quoted. |
This site is very popular lol |
About to go on a run? |
I don't imagine the half year results will do much for the share price either way. NAV is currently 42p compared to a share price of 20p.
Within NAV there is $0.9m of unrecognised performance fees and an unrecognised balance due from Argo Real Estate Limited Partnership of $13.7m. If we ever get to the stage of being able to recognise them then the NAV would increase to 69p. Should ARGO similarily manage to increase it's AUM such that it starts to generate a meaningful profit then I suspect we could be looking at a significant increase in the share price.
However it has been like this for a while now. Classic deep value scenario... |
Looks like the crypto boys really didn't know what they were buying... |
Argo Blockchain #arb is asking shareholders to vote on whether they should release 17 million additional shares, reasons are here: Thoughts? |
The history of Argo is very interesting. It was set up in 2000 by Andreas Rialas, who is a former barrister and ex Deutsche Bank emerging markets loan trader -
By 18 Jan 2007 it had $882M AUM (compared to current $130m) and was acquired by Absolute Capital Mgt for £50.46m (for comparison current market cap is £9m), mostly in shares, leaving the Rialas brothers with a 13.8% stake in Absolute.
-
Absolute Capital Mgt was run by Florian Homm, who turned out to be a crook and was investing in illiquid (and ultimately unrealisable) US pink sheet stocks -
By September 2007 the whole edifice was crumbling. Homm resigned and disappeared.
By February 2008 the Rialas brothers had increase their stake in Absolute to 33% and in May 2008 shares in Argo were distributed in specie to shareholders of Absolute creating, once again an independent quoted entity, with the Rialas brothers as major shareholders - |
Thanks for taking the time to do that Steve. Brilliant. |
Here's my summary of the investment case for anyone interested.
The basic numbers – As at 30 June 2020 Argo, which is an alternate hedge fund manager/investor had net assets per share of 39.9p compared to a share price of 23p. Hidden within this is a receivable from AREOF of $12.2m, which is fully provided, and the recovery of which would add 22.7p to NAV value, taking it to 62.6p, or 2.7 x the current share price. Just under a year ago Argo undertook a tender offer to redeem around 17% of it's shares at a price of 26p. Like with many companies, Argo's share price was hit by the crash early in 2020, dropping from 24.5p to 15p. It has only recently started to recovery. The company is run by the Rialas brothers who own 63.6% of the shares.
Why is the share price so low? - As the company itself says “the current level of AUM remains below that required to ensure sustainable profits on a recurring management fee basis in the absence of performance fees.”. Let's also face it, as I'll show, some of the assets are fairly opaque.
What are the risks – before covering the investment case I'll cover this first. Clearly the Rialas brothers, with a 63.6% holding, could probably de-list this anytime they wanted. It's small, unloved and the cost of being a plc is probably significant relative to total overheads. Related party transactions are not uncommon. 56% of their assets are tied up in a loan to Argo Real Estate Limited Partnership (ARE), an entity that is 100% owned by one of the Rialas brothers and whose key asset is a retail park in Odessa, Ukraine - Another 36% is invested in The Argo Fund (TAF), which essentially invests in emerging market debt and which Argo itself manages. Their holding comprises 7% of TAF.
What is the investment case? – first, on balance, I don't believe the Rialas brothers will screw over minority shareholders. They've had plenty of time to do this (it's been listed since 2008) and frankly, badly treating the investment community when you rely on it to invest in the funds you manage wouldn't be a good look. But no promises... The loan to ARE is basically so that the Odessa development can access funding from the EBRD and complete the project. That would facilitate recovery of outstanding fees from AREOF mentioned above, which is worth 22.7p a share to Argo. Argo have always seemed quite optimistic about recovering these fees although provided for them in the accounts. Finally, success in increasing the AUM by Argo should trigger a more realistic valuation by the market of Argo's assets. This is what they say in their accounts - "The Board remains optimistic about the Group's prospects based on the transactions in the pipeline and the Group's initiatives to increase AUM....Boosting AUM will be Argo's top priority in the next six months. The Group's marketing efforts will continue to focus on TAF which has a 19-year track record as well as identifying acquisitions that are earnings enhancing... Over the longer term, the Board believes there is significant opportunity for growth in assets and profits...Finally in July 2020 we have launched the Argo US Feeder Fund in an effort to attract US onshore investors as the Group's main target is to increase assets under management.''
This is obviously deep value sort of stuff and not most investors cup of tea. It also relies on your view of the Rialas brothers, both whether they know what they are doing and whether they can be trusted. Of that I can give no guarantees... |
A rare bit of movement. Hasn't really seemed to follow the recovery in the stock markets so far... |
Should get interims at end of the month |
Once again, this company is not ARGO blockchain (whose ticker is ARB)!!! This is the thread for ARGO, the alternative investment manager focused on global emerging markets. Take your ramping elsewhere. |
Interesting development. I think the most important part of it though is the statement
"As an additional benefit from the Loan, AGL will possibly benefit from a better recovery on the outstanding EUR 8 m of unpaid fees due from AREOF. Currently, these fees due to AGL are carried at zero value. The Company believes the recovery of outstanding fees is greatly enhanced by the EBRD refinancing and the offered return is attractive compared to other alternatives."
As at the last interims the provision against all amounts outstanding from AREOF was $11.8m. Recovery of those amounts would add 23.3p a share to NAV, taking it to 66.6p. Current share price is 24.5p... |
what is it then |
Once again, this is NOT the thread for Argo Blockchain. |
What developments will there be in the crypto space in 2020? It will be interesting to see how the bigger projects evolve. |
Last couple of weeks Camac Fund have gone from 3.05% to 6.5%. |
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