Burford Capital Share Discussion Threads

[williamcooper104] 23/8/2021 08:06

They should also state all of their ROIC/IRRs on a pre and post carry basis - just as every PE fund does

[riverman77] 23/8/2021 08:01

Got out first thing this morning, surprised only off 2.5%

[kaos3] 23/8/2021 07:58

wow

We set out below the percentage of realized gains in each vintage that has been awarded as carry.


Vintage year % of realized gains awarded
2015 4
----------------------------
2016 4
----------------------------
2017 4
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2018 6
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2019 6
----------------------------
2020 8
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2021 9

and declaring a loss at the same time and paying salaries for their work. is that the definition of greed? probably there is something different in the wiki as the definition of the greed

[williamcooper104] 23/8/2021 07:57

Irritating $70m loss, $20m profit excluding P&L carry charges The Peterson mark didn't include the carry bonus payable to staff on a Peterson realisation Good that they are only paying carry on cash realised - but really not good that they didn't accrue for that on the balance sheet carrying value - means the previously reported carrying value was simply wrong

[kaos3] 23/8/2021 07:56

wow

We set out below the percentage of realized gains in each vintage that has been awarded as carry.


Vintage year % of realized gains awarded
2015 4
----------------------------
2016 4
----------------------------
2017 4
----------------------------
2018 6
----------------------------
2019 6
----------------------------
2020 8
----------------------------
2021 9

[rar100] 20/8/2021 19:39

Isn't it the case that there is simply not enough people buying the shares and the reason for that is it's an esoteric niche market in the general market place that's not understood by 'the masses' and not helped by the legal constraints in giving out 'good news' like most companies do. And those potential new investors can be put off by the share price chart firstly and then the reasons behind the crash. Dodgy accounting is about the worst thing to put off a potential punt, the shame is that any company can be attacked that way and although MW was proved to be wrong/deceitful/slanderous etc. it still leaves a stain.
The only way that will change is good results and good press coverage (which is just starting)but needs the positive sentiments shown to BUR pre the MW fiasco, i.e. that the new asset class is the very best thing since sliced bread.
I hope for both Sept.9th and then £20 forthwith. GLA

[lazg] 20/8/2021 13:17

William,

I totally agree with you that anyone buying the assets would want an upside. And - of course - I lack the information required for a due diligence on a case by case basis.

My main point here is that, currently, the book value of Burford is (mostly) calculated as the costs of the case. I think that this is just a bad metric when estimating book value for lit fin.

All I really believe is that a 2 billion market cap is far too low. This is a cash cow and its a growing cow, so I will be milking it.

I think there is significant upside to the share price I really enjoyed Travis' article when I first read it. Well researched and written. Even he thinks his estimate is conservative.

I am looking forward to the next update.

[three black crows] 20/8/2021 11:57

Laz G and W. Cooper,
Saw this on the other board, looks a lot more realistic to me,
Burford valuation according to Travis Wiedower at :
hxxps://traviswiedower.com/
you can read the full article on his web page but he
refers to Burfords Share Price Valuation, with particular refernce to Peterson.
He believes Burfords Petersen case if won is worth (on its own)between $5 - $15.
If this were added to the current share price we would be looking at $17- $27.

[williamcooper104] 20/8/2021 11:33

There's latent fair value not in the book value, and the value of the operating platform and fund management business (though from memory there's a little goodwill) But someone paying $10bn needs to make a return on that - so say that a modest 40 percent - eg 15-20 IRR over a few years Then you'd need to believe that Burs current case load would deliver c$14bn or about 6-7x current book (and higher on original cost) Burs historic returns are excellent, no question there, but it just won't generate those level of returns across its entire book

[lazg] 20/8/2021 10:55

Crows: sure.

It is not unreasonable to value the book at USD 10bn (I don't believe the accounting principles do this asset class justice) and to have the growth and potential lead to an 2-3 book to price ratio, which corresponds to a market cap of USD 25-30 billion. At 219 mn shares thats a fair value of up to USD 116-137.When reaching my valuation, I have made it a two step process:

1. What is "book" for Burford? I do not believe that the accounting principles that determin the book value are really relevant in the lit fin asset class. Therefore, I have based my "fair book" valuation on a proxy for book. In its most basic form the book value is the total value that shareholders of that company would receive if the company were to be liquidated.

If they sold all of their assets to another lit financer they would get far more than what their books say. One example is Peterson. 38.75% of Peterson was sold for $236 million. That is 10x what they paid for 100% of Peterson. As the other cases aren't sold during maturation and their fair value is not usually updated, there is a lot of untapped "fair book" value imo. I would love to see someone trying to do the math on older cases to find out how much difference there is. For my purposes I just think it is "a lot" (maybe not 20x like in Peterson, but it should be significant). It is not unreasonable to assume that the assets could be sold for $10 bn as is. Happy to see someone tweak that number.

2. Step two: Burford is not beeing liquidated, on the contrary. Its dynamic. Brexit and Covid will lead to a lot of litigation and Burford will be in the thick of it. They will grow and they are the market leader. Also the whole lit financing market is booming. Well in that case a 2.5x-3x book valuation does not seem crazy.

The rest is maths:
10^10*2.5/(219x10^6) = USD 114
10^10*3/(219x10^6) = USD 137

[three black crows] 20/8/2021 10:44

LazG, can you re-post your detail on this 10 bagger please

[lazg] 20/8/2021 10:30

I have explained before (post 21182) why I believe this stock deserves a USD 100+ valuation. It will surprise some (but not me) if we end up a GBP 20 EOY.

This is a ten bagger at current prices.

[three black crows] 20/8/2021 09:47

Lomax 99,
my ambition for the next 12 months would be much higher.
I think 9.50/10.00 is realsitic

[lomax99] 20/8/2021 09:27

£10?? Where is you ambition?

[chester9] 20/8/2021 09:27

This narrative has been constructed since MW by people who really know how to construct a narrative. Hard lessons taught and learned from the "legal" world of finance. Transparency delivered in a clear, as can be, to show the model works, no longer talked about as a one trick pony. A sought out leader in the field with a developing, growing history of consistently high successes. Their track record and narrative will be extended for years to come. I guess you can say 9.50 will be flown by very soon in my insignificant opinion.

[tnt99] 20/8/2021 09:25

Come on my Reddit fans let's push this share up past 10 pounds woo woo

[lomax99] 20/8/2021 09:22

Clearly manipulating it both ways, it frequently drops several % on next to no volume.

[syoun2] 20/8/2021 09:12

Someone’s manipulating the price, probably the MM. To rise so quickly on hardly any volume …

[three black crows] 20/8/2021 08:55

Would like to see, £9.50 before results, then a further lift if we see positive results

[chester9] 20/8/2021 08:45

It's Friday and the price is up, could it be just two weeks to update. Which we all suspect will be positive? Me thinks it's going up and up over next two weeks.

[williamcooper104] 16/8/2021 11:57

As day turns to night :)

[lomax99] 16/8/2021 10:23

Normal action resumes, off c 2.2% on just 13.3k shares traded.

[galatea99] 16/8/2021 06:45

"A former top Wirecard shareholder is seeking damages over the collapse of the payments group in a landmark lawsuit that threatens the compensation bondholders and banks are also seeking.

Union Investment, Germany’s third-largest asset manager, has filed a lawsuit in Munich against Wirecard’s administrator, which over the past year has been selling the remaining assets of the failed payments group.

The asset manager said it suffered €243m in losses when Wirecard filed for insolvency in June 2020. Before being exposed as a sham, Wirecard was hailed as a rare German tech success and was worth more than €24bn at its peak in 2018, replacing Commerzbank in the country’s blue-chip Dax index.

The lawsuit cites more than 70 releases and company statements Wirecard made between 2014 and 2020 that Union says are misleading and fraudulent.

“Our client [Union] was induced to buy the securities by fraudulent and misleading statements by Wirecard,” said Nadine Herrmann, a lawyer at Quinn Emanuel, adding that the claims of shareholders should be treated in the same way as other creditors in insolvency proceedings. 

The claims of equity holders in an insolvency procedure are typically last in line under German law, settled only after other creditors have been paid.

“For us, the consequence [of that] would be not to receive any compensation at all,” a spokesperson for Union said, adding that the legal action was driven by the need to act “in the best interest of our clients”.

If successful, the lawsuit would be a blow to the banks and bondholders who lent Wirecard more than €3bn and would be forced to share any payout from the administrator.

According to a report seen by the Financial Times, creditors, shareholders and other aggrieved parties have filed more €14bn of claims with the administrator Michael Jaffé.

Jaffé and his team have so far generated about €600m selling Wirecard’s assets, including its European core business to Spanish lender Santander and Wirecard North America to US payments firm Syncapay.

In addition to those proceeds, €300m in cash is held at Wirecard Bank. The administrator is also evaluating whether to make a claim against former Wirecard board members under their director and officer liability insurance as well as against EY, the payment group’s former auditor.

Wirecard’s other creditors have dismissed the claim from Union, filing two legal opinions to the administrator laying out their case.

The lawsuit brought by Union is a test case for a broader group of institutional shareholders who suffered losses of almost €2bn in Wirecard’s collapse and want compensation. London-listed litigation funder Burford Capital is financing the suit.

A spokesman for the Munich district court confirmed that the lawsuit had been recently filed, but that a date for a hearing had not been fixed. “It is not yet foreseeable when a decision will be taken,” the spokesman said. 

A spokesman for Wirecard’s administrator declined to comment."

[galatea99] 16/8/2021 06:39

Burford financing suit against administrators of Wirecard.