Burford Capital Share Discussion Threads

[goodbloke1] 11/8/2019 17:02

So basically we are in the same position as at close of play on Friday .No bad news on Gotham report so should carry on its recovery

[molatovkid] 11/8/2019 17:02

So, ultimately, its all been a storm in a teacup....bodes extremely well for next week (unless you are short that is).

A lot of potential money still sat on the sidelines...now the coast is clear I expect a massive influx of that new money and with shorts closing too, that should push this to £10+

[williamcooper104] 11/8/2019 17:01

Agree with that

[nerdofsteel] 11/8/2019 17:00

Gotham are right about this IMO

5. BUR should view the recent public scrutiny as an opportunity to improve its disclosures and governance.

If they do that then they have nothing to be frightened of and can be left alone by speculators and continue to legitimately grow their Business. MW may have done Burford a favour in the long run.

[williamcooper104] 11/8/2019 16:59

Topvest - I've made that point repeatedly But Bur is currently at a premium but not a massive premium to book value You can trade at a premium when it looks like assets are undervalued - eg infra funds often trade 20 percent above But equally you can trade well above NAV if you have an excellent track record In good times Great Portland and Derwent London traded at c40 percent premiums to NAV on the expectations of development profits

[jbro2205] 11/8/2019 16:57

Gotham report, not even worth copying and pasting!
Our opinions and observations about Burford Capital and its shares:
1. After we evaluated BUR last year we shorted the shares, but decided not to publicly share our findings in the form of a Gotham City Research dossier. I am of the view that it is foolish to own shares at a meaningful premium to book value per share, for the following reasons:
a. I believe that high growth financial companies, whose markets values trade at extreme premiums to book value, tend to experience disappointing returns, over the long term.
b. Burford shares and litigation finance exhibited signs to us, last year, of being in the bubble stage of a multi-year boom / bust cycle.
c. I don’t think Burford is able, in coming years, to consistently deliver sufficient returns on capital that would merit a meaningful premium to book value per share. If I am wrong, and the company is able to grow book value per share at a sufficiently high growth rate, its shares will rise, and the company will have earned it.
2. Public scrutiny of Burford Capital was long overdue. The company has had the privilege of raising cheap public capital and enjoying an absurdly high valuation (from this vantagepoint, Burford Capital reminds us of Aurelius Equity Opportunities, whose shares are listed in Germany). The recent public skeptics/short sellers should be applauded for their work.
3. I commend Burford for putting together a conference call in response to the short report in a timely fashion. However, I also found some of their responses concerning:
a. To paraphrase, the “we are lawyers, therefore (by inference) we are trustworthy” statement was very disturbing. When questions about dishonesty are met with ad hominem, appeal to authority responses, the risk of deception is high, according to former CIA/FBI intelligence officials.
b. The explanation the company provided as to how the CFO became CFO seemed plausible but fails to explain why she has remained so. Seeing that Burford’s accounting is in question, the company’s response and tone to questions about the CFO were concerning.
c. If Burford truly “listens”; to investors as it claims, they should clarify or offer greater/additional disclosures. I can think of a few ways they can enhance disclosure without jeopardizing their cases.
d. The response regarding changing their share listing from AIM to the main listing was not confidence inspiring.
4. We think Burford is inappropriately financed. Litigation assets – whose associated cash flows’ size and timing are notoriously unpredictable – should not be financed with debt. This poses a real risk of an eventual asset/liability mismatch nightmare.
5. BUR should view the recent public scrutiny as an opportunity to improve its disclosures and governance.
6. Companies do not fail because of short sellers; I have not heard of a single example where that has been the case.

[winsome] 11/8/2019 16:56

But the book value has almost quadrupled last four years and this is a growth play.

If you want a value play that's gone ex-growth then look elsewhere.

[nerdofsteel] 11/8/2019 16:56

Gotham probably went Long on BUR last Weds or Thurs ;o-)

[lomax99] 11/8/2019 16:56

Well they are a party in the collusion, no way they did not know who the subject of MW's release would be about.

[williamcooper104] 11/8/2019 16:50

Seems that they did do that then decided to actually buy the IP and then realised that as lawyers they weren't the worlds greatest tech investorsFor an activist short you could almost read that note as a buy recommendation (albeit with a modest share price target :)

[topvest] 11/8/2019 16:49

Interesting that Gotham are raising the same point about the premium to book value and therefore fundamentally see this as an investment company. Most people on this thread are ignoring that point, but it's very important in my view. Investing at a significant premium to book value is a risky proposition unless the assets are significantly undervalued.

[winsome] 11/8/2019 16:49

The Gotham report is a damp squib because they couldn't find a smoking gun. Fair play to Gotham for not sensationalising like MW did. Shame for Shareprophets. They thrive on sensationalism.

[haveapunt1] 11/8/2019 16:49

Even share prophets have now tweeted it’s a damp quib and that’s something if they come out and admit it lol

[tsmith2] 11/8/2019 16:47

Lol. So much for the big up then

[tsmith2] 11/8/2019 16:45

absolutely nothing like Burford Acacia defend clients accused of infringing patents.

[williamcooper104] 11/8/2019 16:42

Acacia Research: A 'What If' Musing $ACTG https://seekingalpha.com/article/4265624Nothing like Burford

[williamcooper104] 11/8/2019 16:40

ACTG - the comparable that Batman mentions aren't really that comparable They acquire IP and then sue for infringements - seems that much of their recent purchases have been rather doggy

[tsmith2] 11/8/2019 16:40

Not one ounce out of detail. This is funny:"My familiarity with litigation finance – coupled with great research by my team – helped us come to hold informed and nuanced opinions about BUR." We think Burford is inappropriately financed. Litigation assets – whose associated cash flows' size and timing are notoriously unpredictable – should not be financed with debt. This poses a real risk of an eventual asset/liability mismatch nightmare. I don't think they really understand the business about managed fund commitments versus the company's own commitments or just being disingenuous.if TW sensationalises this (which he probably will) it won't wash. bear squeeze tomorrow..

[adnan17] 11/8/2019 16:37

Hahahahahahahah

So that is Batman's best response. Jeez. The hype, the drama and he comes out with something so limpish.

Why bother. Should just crawl back under the rock he came from.

[blah blah] 11/8/2019 16:19

Wow. If that is the extent of Gotham coming to the party, nothing much for holders to worry about.

[nerdofsteel] 11/8/2019 16:11

Not much new from Gotham

[nerdofsteel] 11/8/2019 16:11

Not much new from Gotham

hxxps://www.scribd.com/document/421488101/2019-08-11-Dear-Burford-Capital-Short-Sellers-Are-Important-Players-in-Fulfilling-Justice-FINAL?source=post_page-----4d88d48e6fe6----------------------

[stoxx67] 11/8/2019 16:04

william

i stated last week, i just do not see a response from MW at all, the risk/reward equation no longer makes sense for them as anything else they publish lands them deeper in the mire (if that is possible) and helps burford build further arguments against them. They now have to try to defend the fallacious and inaccurate details in their note, very difficult to do this especially when you have been found out by of all people Lawyers. The game was up for MW as soon as Burford offered the detailed response.

even if they did publish something else, very much doubt the shares would fall in a big way again as the reputational damage to MW from Burford response has shown MW for the fictitious and fallacious raiders they are, its obvious market manipulation, which one assumes will be dealt with accordingly

once Burford go for the jugular, then its all over for MW and anyone else involved in the front running of the MW "research" note.

i do agree it gets interesting from here as to the level of damages Burford can extract from MW.