I got in touch with QD and you guys were right. They've amended: hxxps://quoteddata.com/2024/03/chrysalis-correction-note-published-7-february-2024/ |
No, I'm still here. Intend to hold until we get news on Graphcore, Klarna and probably Starling too. If wefox is cash positive then I doubt that will remain private beyond this year either |
Donald did the maths and sold out!!! Joking DP... |
I think your maths is right but I don't understand how Quoted Data, the manager and the board can have all got it so wrong. |
Donald - did you take the 3 minutes, dust off the abacus and get comfortable with the NAV uplift of Klarna IPO'ing at $20bn? |
https://www.klarna.com/international/press/klarna-ai-assistant-handles-two-thirds-of-customer-service-chats-in-its-first-month/More value being added at Klarna pre IPO. |
Big trades going through and buys above 90. Wonder if Jupiter are finally finished |
We can therefore say that if Klarna IPO's at it's target price & Starling manages £3b, which should be easily achievable if it was worth £2.5b in March 2021 in a low rate environment, the current share price is covered by these two holdings alone.
I think we can therefore say that there is a substantial margin of safety here :)
This is further enhanced as the largest holding, Wefox, worth 32p of NAV, raised $55m in Nov 2023 at a $4.5b valuation from Deutsche Bank & Unicredit... |
Have also been digging into their Starling position which makes for very good reading.
Amounts invested / dates
£19m / Apr 2019
£20m / Oct 2019
£9.2m / Feb 2020
£5m / May 2020
£35m / June 2020 (where the valuation was disclosed as being £1.3b post money, and the earlier rounds were materially uplifted, it's therefore possible to estimate that the first 4 rounds were done at an average valuation of £500-600m)
£10m / Mar 2022 (£2.57b post money valuation, at which point the total holding was disclosed as being worth £259.7m, so they owned 10% of Starling)
£20m / Feb 2023 - (secondary round at ~£1.3b valuation, thus increasing their shareholding by 1.5% to ~11.5%)
So at a £2.5b valuation, Starling would be worth ~£287mm / 48p to NAV, and some 19p more than the last NAV disclosure (which valued Starling at £1.5b)
At the £3b valuation mooted by QD, it is worth 58p of NAV and at the £4b Monzo level it would be 77p... |
 Re. Klarna, the CHRY RNS from 11/07/22 is helpful;
I'd missed the fact they added an extra $8.7m at what is around 30% of the mooted IPO valuation;
"Today, the Company can report that Klarna Holding AB ("Klarna") has announced an $800m funding round that values the company at $6.65 billion post new money.
The round, which was larger than anticipated, was led by Sequoia Capital and has been undertaken at a valuation that represents a material discount to the Company's current carrying value of the asset. Other investors in the round include Silver Lake and Commonwealth Bank of Australia, both existing investors, and new investors such as Mubadala Investment Company and the Canadian Pension Plan Investment Board.
The Company's Investment Adviser believes the current valuation to be very attractive, and the Company has therefore committed to its pro-rata entitlement of $8.7 million. Consequently, the Company will not suffer any dilution of its holding because of this funding round."
If they had to add in $8.7m out of an $800m round to maintain their holding then it tells us that they in fact own 1.0875% of Klarna
So a $20b pre money valuation would equate to $217.5m of NAV, which at the current FX rate = £171.8m / 28.8p per share & would be a 13.2p uplift on the last NAV figure |
AVI on board is very good news - very smart investors and they will work with the company to ensure value is returned to shareholders. |
Added on the back of that. Those were the 2 big 12m trades earlier in the week |
OK, thinking about this, the way it makes some sort of sense...
CHRY owns around 1% of Klarna
Klarna floats for $18bn
CHRY stake is worth $180m
There are 595m shares in issue
That works out at 30c/share
Quite different to
"The managers envisage that Klarna could be worth about $18bn based on Klarna trading on the same gross profit multiple as closest-listed peer, Affirm. CHRY has a 1% stake. On those figures, a Klarna sale could add about 30p to the NAV."
If that is the case, it is pretty poor that the Company allowed it to go out like that.
And thanks Tom and Rimeau for highlighting |
I've put a call in.
The figures as you say don't make sense. I just wonder whether the bit that isn't right is CHRY having a 1% stake. I've not seen that elsewhere.
The QD paper also says the following about Starling:
"CHRY’s managers sees substantial upside to Starling’s current £1.16bn valuation
We discussed Starling’s 2023 financial year (FY23) results in our last note, however, there is reason to believe that the company’s carrying valuation for Starling is conservative. The managers recently noted that the company is currently generating a pre-tax ROE of 40%. We believe that this implies c£300m of profit before tax. A £3bn valuation seems reasonable, which would add over £270m to the value of CHRY’s stake, or about 48p per share. Alternatively, the managers note that Monzo, which is a similar size to Starling, is rumoured to be worth about £4bn, which would suggest an even bigger uplift is achievable."
Again, i don't know if the maths is correct, but the note is written by James Carthew, who is a pretty respected guy in the City.
I think we just need one exit and the rerate will be substantial. |
I'll contact QD. The company have paid for, signed off and provide a link to that paper from their website. The paper was prepared specifically to provide further colour around the last NAV announcement. It would be very poor if it was wrong, so I will try to get to the bottom of it |
74tom, thats all correct, thanks for checking, you to Riverman. Donald, come on, spend 3 minutes with a calculator or excel. You sound very very important with your board positions so i am sure you are more than capable of basic maths. I managed it pre coffee this morning which i can assure you is tough for me. |
DP, you honestly crack me up. Can you not work it out yourself?
30p incremental onto the NAV of a company with 595m shares would be worth £178.5m
The Klarna holding was valued at £93.2m on 31/12, this was a significant upgrade from the £56.1m carrying value at 30/09, which was below the £71.4m cost.
So to add 30p, the total holding would need to be valued at £271.7m
However, if CHRY own 1% and Klarna gets an $18b valuation (as per the quoted data piece) their stake is worth $180m / £143m. That's £50m more than their last valuation, or 8.4p per share.
At $20b valuation it's slightly higher at £159m, so 11p incremental to NAV.
All this is based on the assumption that they own 1% exactly, based on the fact the analyst can't get the NAV right then it's possible the true percentage is a few ppt higher or lower... |
I was on the board of a company that used QD and we had to approve the report for publication. So I think it must be right but don't disagree with those who question it |
Surely quoted data is paid for by the company cannot see them wanting to mislead investors. |
Clearly they are wrong Donald! Obviously i hope i am wrong but my numbers make sense. |
In the Quoted Data update 2 weeks ago they said if Klarna listed for $20bn it would add 30p to NAV. |
My calcs are similar, it looks to be valued at around $10.5b, at 31/12 it was held at a value of £93.2m and the last disclosed cost of £71.5m was provided in the June accounts. This tallies with the fact they they invested £23m in August 2019 at a valuation of $5.5b and a further $50m in September 2020 at $10.5b. So at the last NAV date they were at breakeven on the 2020 investment and around 90% up on the 2019 sum. They also have an unrealised FX gain from the dollar strengthening over the invested period.
At the mooted $20b IPO value they would have a liquid investment with a value of ~£170-190m (depending on IPO dilution), which is around 33% of the current market cap. On a NAV basis it would add around 15p to the last reported number of 143.37p (180-93/595 million shares), meaning the current share price is trading at a 44% discount...
From the annual results;
"While speculation has swirled around Klarna's IPO over the last few years, this is the first time the Investment Adviser has seen the company publicly state conditions are now "in place" for it to consider such a move. The ramifications for Chrysalis of an exit that at least underpins the asset's valuation are hard to understate. Such a move could potentially deliver substantial liquidity into the Company and allow the new CAP to come into effect."
Has to be a strong buy now, this was the key catalyst I had been wating for. |
Thanks rimau - that looks about right to me. Yes I think could drive a major rerating well beyond 8p as market understands the value in the portfolio. |
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