Burford Capital Share Discussion Threads

[sogoesit] 09/8/2019 10:46

winsome, because the bears are speculating on future gains/losses which can, by definition, not be corroborated.
Speculation, unless intentional for manipulation purposes, cannot be argued against.

[geheimnis2] 09/8/2019 10:45

I have no holding in Burford and had never heard of it until a couple of days ago.

I do have experience of holding stock which has been subject to "attacks" by Muddy Waters and similar organisations.

Does anyone have a sense of the track record of Muddy Waters? How often are they wrong?

[babbler] 09/8/2019 10:44

it isn't. They know it... they just want you not to know it...

[babbler] 09/8/2019 10:44

higher lows being made however

[babbler] 09/8/2019 10:43

consolidation... takes time after such a drop... Will go soon enough. Slow and steady imo

[winsome] 09/8/2019 10:43

While I await bbsm's reply on cash receipts let me reiterate that cash receipts to end Dec 2018 reached $1027m plus another $310m in 2019 interims plus another $100m as stated by BUR in webcast yesterday.

That is nearly $1.5bn cash receipts from their litigation investments. Why is this being ignored by the bears?

[fozzie] 09/8/2019 10:40

Slightly perplexed as to why this is just staying at this level? One would have thought it would be going up after the rebuttal, call and Dir buying.

[metis20] 09/8/2019 10:40

Reasons for not moving to the main market - see pages 13 and 14 of Burford Interim Report 2019 -

[hawkind] 09/8/2019 10:40

I think directors will buy big tbh as it seems they will also try and get in as low as possible, they are only human after all. Think we will see a series of regular buys as appose to an almighty tranch bought.Was disappointed with initial purchases but makes sense to buy lower.Would be brilliant to get in, in the 400's. Think I would remortgage with the strength of that response :o).Come on MW give me another opportunity

[minerve 2] 09/8/2019 10:40

"I think you misunderstood “at what price”,I didn’t mean what issue price,I meant what price was the company prepared to pay to keep a stock exchange listing when you can get dumped on by the likes of Muddywaters."

Exactly. And it isn't just Burford with capital costs which lose out, investors too. As I have said plenty times before we need a stock market we can invest in. If markets continually allow these hedge-funds and PE players to behave the way they do then traditional investors will either lose or go elsewhere. Either way, it will eventually affect the real economy and futures.

Current capitalism is unsustainable. Something needs to change.

[sogoesit] 09/8/2019 10:39

Indeed jonwig, GAAP accounting is still used as a comparator at US companies.

On December 31 2018 I closed a company of mine's accounts with substantial "unrecognised losses".
Three months later they were "unrecognised gains".
This regulation does not handle volatility at all well.

[jonwig] 09/8/2019 10:36

@ Sogoesit - yes, you can blame IFRS for that. Same with property companies: revaluations are booked as profits or losses. In the old days you had GAAP which was a lot simpler to understand. Still used in the US, I believe.

[sogoesit] 09/8/2019 10:32

The accountancy "gurus" have taken what used to be in days gone by balance sheet issues and placed them in the P&L. In doing so they have raised the ogre of "valuation" in the P&L which could easily be eliminated within periods between reports.
We have to recognise these issues for what they are and live with all this (over regulated) unintended consequences, imv.

PS. understood steeplejack. So a long term issue then. Thanks.

[kirkie001] 09/8/2019 10:29

Williamcooper - I don't understand what you're saying about the gains in the P&L.

If the balance sheet value of investments is "right", then the only place that the gains can have gone is P&L. Ergo, P&L is "right" too.

Too many people don't understand how to do fair value accounting, and what the accounting entries need to be for realised and unrealised gains in order to comply with the requirements of IFRS.

[412069] 09/8/2019 10:28

I think most want this to bounce back to show the scum shorters a lesson, others will now do as Burford have if coming under a short attack well done the BOD.

[steeplejack] 09/8/2019 10:28

It has a stock exchange listing that means it implicitly values the ability to raise money by issuing equity.I know that the company does not intend to raise equity finance anytime soon .My comment was made in respect to speculating that the company might consider going private which would mean that it no longer had access to equity finance like it has now!

I think you misunderstood “at what price”,I didn’t mean what issue price,I meant what price was the company prepared to pay to keep a stock exchange listing when you can get dumped on by the likes of Muddywaters.

[williamcooper104] 09/8/2019 10:26

Agree - it's not a short attack - some company's have over 50 percent of their stock lent out It's a long panic

[babbler] 09/8/2019 10:26

830 should break this time imo.

[winsome] 09/8/2019 10:25

bbms, thanks for the link and I hear what you say but IMF do not 'slate' BUR nor do they criticise or condemn their accounting method.

I do concede that perhaps BUR could calm nerves by commenting on IMF's different approach and run a parallel report based on IMF's accounting methods to show how the results would differ. But I don't demand or expect it.

Now, do you concede that $1.5bn in cash receipts on BUR's investments since 2010 is totally relevant and cannot be disputed? It seems the unrealised gains are resulting in cash at later stages to more than a satisfactory level.

[1corrado] 09/8/2019 10:24

back above the 800p mark will it stay need to go much higher than that ............

[bbmsionlypostafter] 09/8/2019 10:20

If MW held only such a small short at about 1% why do you think BUR shares had such a drastic reaction to their report? Even the day BEFORE BUR was identified as the target the speculation that it was BUR caused the shares drop alarmingly.

To me that indicates there is an understanding in the City that not all is as it should be within BUR. Might be wrong, time will tell & all that but I'd say this is a fragile recovery & there is more to come out in the wash.

Oh, & TBH the phone thing, talk of share buybacks & the director buys smack of trying too hard to me. Looks like they're trying to convince someone.

[williamcooper104] 09/8/2019 10:20

Say for set up a litigation finance co Start with £100m - invest and turn this into £200m in two year time Question is - is the value of the company/fund £200m (being its net assets and if the company is an investment trust then that's its value - or perhaps say £240m as it would command a premium) or £1bn (applying a 20x multiple to £50m earnings and valuing it as an operating business) Now assume that of the £100m gain say £90m came from a one of gain (in Burs case there will be many more profitable cases but not that many £1bn from £17m cases) Even if you think you should put a multiple on the £50m should you not say that some of this is exceptional and not apply 20x on it To me this is and always has been the fundamental valuation problem - much more so than Fair Value So my floor for Bur is Invested capital with fair value uplift (I've a big problem with fair value in P&L and the way Bur has taken it to the P&L - less so on balance sheet) and then perhaps a 20 percent premium (what you would see on an outstanding investment trust) less debt

[sapper2476] 09/8/2019 10:15

Their short on BUR was never over 1% so it has hardly caused the problem, however, it is not possible to see how many are under 0.5%. The problem is that news, fake or otherwise, in this connected world moves faster than companies can react to mitigate the problem, hence punters sell on mass at any whiff and a snowball effect occurs. Directors have put a floor on the price at around £7 - £8 and I expect further comment from them or industry in the coming weeks. On the positive side, it has allowed people like me to buy at around the £8 mark which would not have been the case for a couple of years now. Either way, results will provide the answer going forward not comments from a company out to target the market.

[sogoesit] 09/8/2019 10:12

steeplejack Post 8608:
"The company will be watching closely.If the shares don’t return to a satisfactory rating,I would expect Burford to be taken private.It clearly values recourse to equity finance but at what price?The last two days must have been a torment."

I appreciate your posts but why do you speculate, and contradict the company, when you say "It clearly values recourse to equity finance"?
Recent RNSs, the results included, state that recourse to equity is not on the cards. Have you read these statements?

Regards,