Burford Capital Share Discussion Threads

[mad foetus] 08/8/2019 08:32

Agree Chris, coming out and saying what they value Petersen as would help a lot. This is all about sentiment and perception, and only full transparency will address that. I hope they come out with a very full, detailed rebutta

[slogsweep] 08/8/2019 08:31

Muddy Waters guy interviewed on Today BBC radio 4 this morning pretty damning on BUR. Bur declined to put anyone up to give their view. What came out also was that any share associated with Woodford is in the shorters sights.

[chris_engel] 08/8/2019 08:27

I think the accusation with the largest impact is the fair value accounting. In the FY/18 report (p. 20) the reported cash figure for core balance sheet litigation (single and portfolio) is 644.6m. They value it at 1222.3m (p 25 - single & portfolio balance sheet). This means that there is 578m of unrealised gains.

Petersen is a most likely a large chunk of it. The question is how much. MW assumes that nearly all of it comes from Petersen. We don't know, but we do know how they have value Teinver at the time. Here is from the RNS:

"At the end of 2016, at a point when the arbitral tribunal had decided the key question of jurisdiction in Teinver's favour but had not decided the merits of the case, the investment was carried at a fair value of $30 million, $17 million of which was recognised as an unrealised gain (19% of the ultimate total profit) and $13 million of which was cost. During 2017, the arbitral tribunal decided the entire matter in Teinver's favour and awarded it substantial damages, and Burford increased the investment's fair value by $39 million to $69 million, generating $39 million of unrealised gain and bringing the total amount of unrealised gain to $56 million (60% of the ultimate profit). In 2018, when Burford sold the investment, it recognised a further $31 million of income to bring the matter to $100 million of proceeds and an $87 million realised gain. Now, in 2019, Burford will recognise the final $7 million of income associated with the put's expiration."

So it was marked up 19% of the ultimate gain after the question of jurisdiction. And marked up to 60% only AFTER the the arbitral tribunal decided in favour of Teinver.

If we apply this to the Petersen case then we are at the stage of the favourable jurisdiction. Assuming 3b value and 1.5b (50% after cost) return to BUR, then BUR would get paid 915m for their remaining 61% of the cake.

19% of that would mark Petersen at 174m. If they value it at 30%, this would be 275m. I doubt they would mark it up higher than that, given that they have stressed the risk of the case.

This leaves 300-400m fair value gains unaccounted for.

I guess there is only two explanations. Either MW is right and BUR have valued Petersen at a very high multiple, or one or multiple cases have a large value attached to them.

The question is if this is justified. I hope they will shed some light on this.

[nw99] 08/8/2019 08:27

No need was done yesterday and have done nothing wrong

[samartin] 08/8/2019 08:26

It's a struggle

[cc2014] 08/8/2019 08:26

No RNS this morning from management refuting allegations which is really poor.

[minerve 2] 08/8/2019 08:26

Shorts will allow rise and then switch the tap on again. Who do you think may have the biggest capital flow? A US shorter with friends or a gated UK fund in turmoil?

[amt] 08/8/2019 08:22

Certainly muddied the waters here.

[mad foetus] 08/8/2019 08:20

There are so many unknowns. But one important point is that H1 results said SWF Fund was 25% committed, so there is probably $400m left there to meet future commitments. Clearly they are going to have to slow down their land grab. But with the average case duration 1.7 years, liquidity is unlikely to be a problem.

[nw99] 08/8/2019 08:19

Shorts will cover sharply here

[tsmith2] 08/8/2019 08:15

tick tock shorts

[williamcooper104] 08/8/2019 08:14

I'll just go for volatile - shorts will be covering Key question will be is any bounce a real recovery or just dead moggies flying Suspect the latter unless it's on the back of positive news flow

[nw99] 08/8/2019 08:09

I will go for an up day 650 close

[owenga] 08/8/2019 08:07

I'll go for a down day and a 500p close.

[tsmith2] 08/8/2019 08:06

big up day

[nw99] 08/8/2019 08:03

Big bounce on the cards

[datait2019] 08/8/2019 08:02

Timber looks like

[williamcooper104] 08/8/2019 07:58

What we don't know is how much those unrealised gains drive bonuses

[nobilis] 08/8/2019 07:56

9.00 today im in!!

[1oughton] 08/8/2019 07:56

shes best doing what she only knows - the washing up

dopey bird



galatea998 Aug '19 - 07:46 - 7877 of 7884
0 2 0
Tracy Moore, do grow up, you moron.

[mad foetus] 08/8/2019 07:56

I would not be at all surprised if this was no longer a listed company by year end. With Barnett and Woodford potentially forced sellers and Bogart and Molot owning a big chunk, plus close relations to a SWF and US sources of capital, a deal could be done quickly. If Bogart and the key staff decided they wanted to be privately owned, that would be that: not much business left without them.

[5chipper] 08/8/2019 07:55

"Burford will issue a detailed response to the report as soon as practicable"

I wonder how long this means?

[scubadiverr] 08/8/2019 07:54

An RNS states clearly that MW did not make contact BUR. If BUR had advanced warning, such and attack could be defended and the MW's efforts would not be as profitable. Who cares about accuracy and PI wealth?!?

[wardy333] 08/8/2019 07:52

Interesting day coming up here, which way will it go?

[tsmith2] 08/8/2019 07:51

Yes, irony lost on muddywaters