Burford Capital Share Discussion Threads

[luckymouse] 30/7/2019 16:14

Well the LSE & the FCA are responsible for aim being a wild frontier - surley a stricter set of rules (extra auditing, director behaviour, limitation on warrants etc - the usual carp) for the Aim100 at least would add some respectability to the mkt whilst still allowing some advantageous latitudes.

They have addressed one need - a venue for small co's to raise risky venture capital, but not the other, for it to be trustworthy

[shanklin] 30/7/2019 16:08

At the risk of this becoming a hostage to fortune...

...surely the only reason we have been having all these worried conversations is that the share price has been falling for no apparent reason?

[jonwig] 30/7/2019 15:52

LuckyM - yes, just another big cheese ... but one who had One Big Idea, and is running with it! On IPO ten years ago, AIM was their only avenue to raising cash (with Guernsey on top). You could argue that for good companies to stick with AIM is a moral stance.
Was that cake shop on AIM? (I forget.) How about Big Mike?

mad - I'm pretty relaxed (some might say complacent) about the share price Being short a few million shares doesn't come cheap, and eventually these chancers will become exhausted of funds to hold their positions. And there isn't much downside left to reaching the CG target. Soon they'll throw in their towels.

[dekle] 30/7/2019 15:45

Perhaps the main reason for the share price fall is based on the speculation about how they will raise the funds to take advantage of the investment opportunities they have. There must be some disappointment of the institutions who purchased at a higher the prevailing price. Would they fund raise via a rights issue and would all the existing shareholders have the funds available to invest? Would they offer shares to the disappointed institutions? How much do they want to raise?

[mad foetus] 30/7/2019 15:35

You are probably right Jon, it is just frustrating and confusing to see results smash expectations twice, share price respond positively twice, and then twice something pulls the carpet away. Never seen it happen before.

[trident5] 30/7/2019 15:29

JW - staff costs were $50m in 2018 - note 12 in the accounts

[jonwig] 30/7/2019 15:27

LM - in 2016 I was told (in person) they had no plans and it wasn't worth pursuing anyway.

Are you over-analysing?

[luckymouse] 30/7/2019 15:23

He said they advised not to move from aim in the presentation - I decoded it as they may have tried to advise - but it didn't suit his purpose

[jonwig] 30/7/2019 15:23

A current discussion, how much are the top three paid?

Of course they don't say. But the 2018 AR has "operating expenses" as $71m.
They don't say how much of this is wages, but that's whare wages are situated.
So what else is there?

• rent (they don't own their offices),
• corporate legal fees (they need external counsel), listing costs,
• directors pay,
• liability insurance,
• etc., etc., etc.

Maybe they say somewhere how many employees they have but in the AR they cite 41 who used their personal wealth to invest with the SWF. They also say all employees get full health cover, etc. In the US this isn't cheap, is it?

So I guess the answer for the top three, is probably "a lot, but maybe not as much as you think". These expenses are 22% of PAT, about the same as last year; so it looks like their wages are closely aligned with profits.

Personally I don't feel it's an issue, nor do I think AIM listing is an issue to bash on about!

[trident5] 30/7/2019 15:20

But you said they didn't try - hence the dissonance.

[luckymouse] 30/7/2019 15:03

Well of course those banking spivs try - until they run into a bigger smarter fish from higher up the corporate & legal ladder. It's Dave from wembley in a suit whos blagged a job in the city pitching to a big cheese from Time Warner - who do you think is gonna win that pitch.

[mad foetus] 30/7/2019 15:00

Lucky will have a view but it feels to me like we are in a 14/16.50 trading zone right now. I suspect when that breaks it will be to the upside but it may be many months away. I'm not convinced we'll see 12.20 retested

[trident5] 30/7/2019 14:35

Since when have banks advised potential clients to not do anything?

[mad foetus] 30/7/2019 14:29

It's also palpably untrue: who here believes that Bogart has no say over the direction and strategy of the company? If he does, he is a director, end of.

[mad foetus] 30/7/2019 14:14

I think you are right on the liability point but my retort would be whether it is right that liability stops at a board of NEDs being paid a combined £400k annually rather than with the CEO who founded and fronts and owns a significant share of the company and is paid many multiples of that amount? It looks like a structure that works for Bogart rather than for the shareholders

[luckymouse] 30/7/2019 14:00

At the end of this presentation he answers the aim question - the bonds are in fact on the main mkt - but three different bankers advised him not to move to the FTSE - although he doesn't reveal their specific reasoning which is the perinant point

He mentions in the states law firms are not allowed to collateralise their cases directly - hence the reason for third party financing & being listed over here perhaps.
Overall - they come across as just clever lawyer types - so have most the angles tightly sewn up technically - notably tighter than usual. That's not the same as being fully transparent or having street smarts to mkt sentiment & short profiling methods though.

So my read is there's a fair chance they are just a bit too clever for their own boots - and that weakness is being exploited by pros in an attempt to get woodfords shares at a distressed price. No one complained about cash flow on the way up.

I wonder if both sides deserve each other here

[ptolemy] 30/7/2019 13:13

Mad,

Aren't the two issues of Bogart not being a director and BUR not being quoted in the USA related to BUR attempting to minimise corporate or personal liabilities?

The segregation of duty and limited jurisdiction mean would-be claimants have limited options to take BUR to task if they believe they have acted inappropriately. A US-quote for BUR would surely increase their potential liabilities.

[mad foetus] 30/7/2019 12:23

I just think it is odd for the public face of the company not to be a director. Fine if it is a fund and he is the manager, who is legally a third party service provider, but that isn't the case. It would just be better all around.

[trident5] 30/7/2019 11:18

As dgdg1 says - they could voluntarily disclose their pay without going on the board.

[edmondj] 30/7/2019 11:12

It has definitely been argued at some point in the corporate governance debate, boards should be genuinely supervisory i.e. non-exec directors only, however this inclines more to the German than Anglo Saxon model.

And yes, the modern expectation is for transparency on top people's pay/benefits.

[dgdg1] 30/7/2019 11:10

Or the company could just disclose their pay without putting them on the board