Burford Capital Share Discussion Threads

[blusteradjuster] 13/8/2019 13:45

SK is doing a proper shift today.

What a trooper.

[sweet karolina2] 13/8/2019 13:40

winsome,

It is not about convincing MW - you are 100% right BUR never will. It is about convincing investors. The indication was that more retail bonds would hit the market this year, so BUR do not have the luxury of waiting that long. Announcing a firm commitment to making the accounting and governance changes would only be a start, before any bond issue the changes would need to be implemented and proven to be effective, if the next issue is to avoid junk bond status.

[sogoesit] 13/8/2019 13:33

Anyone know what the downside risk quantum is when taking on a case, on average?
(Just curious so I can validate my spreadsheet).
TIA

[winsome] 13/8/2019 13:32

Will be interesting to see what changes BUR make in coming weeks if any. I'd hope they'll announce they'll be bringing forward their plans to list in US to H1 2020 and that any necessary board changes and accounting-related changes/disclosures that are required as a result will follow. That will hopefully allay fears without directly giving into MW's demands, which they shouldn't, cos they'll never please that guy. Will also be the only way, as alluded to above, for them to be able to raise more capital at a good price. So for me its inevitable now.

If they do that, then the flawed MW report might just have had some benefit. Investors have been asking them to dual list for some time before MW came on the scene.

[winsome] 13/8/2019 13:10

cc2014, not sure all the bond holders are more savvy than shareholders. Most are probably the same retail investors. I hold the bonds but not shares at the moment. Not worried about the bonds at all but the 'perceived risk' that MW has souped up clearly spooked the bond market a bit.

[winsome] 13/8/2019 13:05

Petersen will take years to resolve in the US court. My guess is at least 5 by the time all the stalling and appeals are exhausted. How many people will be thinking back to this week's events in Argentina by then?

[molatovkid] 13/8/2019 13:03

Some know alls on here....should be in litigation finance chaps!

[sweet karolina2] 13/8/2019 12:59

winsome,

Fully agree with you re pharma, except for the really big ones with a wide portfolio of drugs already selling and a not overly onerous pipeline of new ones in trial. I have never bought into any small cap pharma and I am extremely cautious on biotechs in general.

clocktower,

Before the Argentina election results I would have said if BUR can't raise money through bonds they could sell a bit more Petersen, but that looks doubtful now. Hopefully BUR can just cut back on taking on new cases, but a liquidity crunch, should there be one, would still be entirely resolvable with a placing / RI / OO, so current bondholders needn't be so concerned, but there is no doubt they are concerned.

[cc2014] 13/8/2019 12:59

#10315.

I would suggest the bondholders are more financially savvy than the shareholders and now want a significantly higher yield to hold the bonds.

BUR3 the longest dated UK bond is now trading at 8% yield which tells you any additional funding BUR want to get from the market will need to be at that rate or higher.

Furthter the bonds are in reversion with the shortest dated bond paying 9%, telling us there is currently an inefficient market.


If you believe BUR is a money making machine where you put £1 in and get £2 out then paying 8% interest instead of 5% when they need new capital is all a bit frustrating. If you believe their margins are alot tighter than that the sums look different.

[trident5] 13/8/2019 12:58

And events in Argentina must have left the recent Peterson buyers licking their wounds.

[my retirement fund] 13/8/2019 12:55

Exactly they cannot raise finance any more at 6.5% the game is up. This is now a slow motion car crash !!!

[winsome] 13/8/2019 12:49

So MW seem a bit desperate this latest response, just exaggerating even more their previous innuendo and criticising directors for high remunerations that haven't been proven in in away, just speculated upon.

SK makes some good points today. I wrote to Burford on Friday to tell them they need to address investors concerns whether or not these concerns are valid, otherwise this circus will drag on. Every email from investors/ex-investors should have a cummulative influence.

Is litigation investment risky as some claim? of course it is, but BUR seem to manage that risk pretty well. Compare to the gambling that pharma companies do, pumping $100m's into new drugs that might not work. Or commodity companies that might not find oil or diamonds with all the money they spend drilling. I could go on about many other sectors that investors should find much more difficult to understand.

[clocktower] 13/8/2019 12:48

If they cannot restore bondholder confidence, they will struggle to raise the funds they need to keep the roller coaster rolling, will they not.

In flash one sees these sort of situations stress the whole business, it takes up management time, inside holders stress because they see their own money drifting down the drain, and the focus on making money turns to preservation of ones own I expect.

Seems the days profit takers are already moving in the other direction, as its retreated from around £8.

[williamcooper104] 13/8/2019 12:42

It's a bit of brexit and a lot of retail woes The equivalent of Land/bland and Intu in the States would be trading at similar FFO multiples

[sweet karolina2] 13/8/2019 12:38

adnan,

Burford's retail bonds are not REITs and have nothing to do with Brexit - nor do US REITs for that matter (and nor do UK property prices and associated investments, it is a global phenomenon and actually just part of a natural cycle, which got out of hand on the upside due to QE and low interest rates globally).

I was surprised at quite how spooked the retail bond holders were by the initial MW report. It was pretty clear from the outset that "arguably insolvent" was there for headline grabbing shock value. That claim has not been repeated in the latest, nor any attempt made to make the argument that justifies "arguably" - only a very tenuous one could be made in my view and that relies on the Argentina election results, which were not even foreseen at the time of the original report.

It was no surprise that the bonds bounced back very quickly, having clearly over reacted when crashing to 60p in £ (normally around that level bond holders are pricing in almost certain 0p shareprice). My question is why are the discounts still so large and in the case of the 2026 bond at 20%? The holders of those bonds clearly view a significant risk that BUR will go bust before 2026 as that is what the price is saying.

It is very clear that BUR management have a long way to go to restore bondholder confidence, before it can hope to issue any more.

[sapper2476] 13/8/2019 12:23

My filter is in overdrive today

[onjohn] 13/8/2019 12:19

one for my filter

[clocktower] 13/8/2019 12:15

The posters seem more bullish today on the thread but the reality is that until facts are known, this could come under further serious attack at any time.

[onjohn] 13/8/2019 12:14

Wait till joint brokerage appoint of Goldman Sachs and Bank of America etc

NY listing


£20 target for me

[adnan17] 13/8/2019 12:10

I take your point on the REITs; however I believed this to be due to Brexit Risk. If we look at the US REITs are trading at only 6% discount to NAVs.

hxxps://www.spglobal.com/marketintelligence/en/news-insights/trending/mr6obe9YXKMoHcAZkBwbfw2

Going on to the Petersen Case the way I view it is Burford invested roughly $7m and have made $236m already from it by selling portion. The portion they hold is valued very conservatively. So yes, that could fall, but nevertheless they made a huge profit on it already.

They have a track record of making returns from their investments. Out of 98 cases, they have made a return on 66 cases and lost 32 according to their concluded cases table.