Hat tip to Affan
Zeus Capital initiated coverage. Make an note of some of the things they say:
" We estimate Chrysalis’ stake in Starling could be worth 33% more, equivalent to an additional 9.6p of NAV per share. Further, we think Chrysalis’ stake in Klarna could be worth c. 80% more (£169m), equivalent to an additional 12.4p of NAV per share. This uplift in Starling and Klarna would increase NAV per share by 15% to 165p, making the Chrysalis shares trade at a 52% discount. We see no reason why the carrying value of other major assets is too high, particularly as the interest rate tightening cycle in the UK, US and Eurozone comes to an end and discount rates start to fall."
" Furthermore, on 5 December Chrysalis announced it had visibility over a disposal that would add 5.5p per share to the Group’s NAV at 30 September 2023, which we estimate could result in an inflow of £56m if it relates to one of its three medium sized investments (see page 16), taking cash to c. £75m" |
thanks for comments DP and R . it really is doing well today and profit taking not happening yet .Quite a high volume stock too but spread a bit wide . |
We did revalue Klarna a fair chunk from £56m (Sept'23) to £93m. The IPO however should see our valuation worth £140m or double the initial cost of investment. This will be game changing for Chrysalis as the NAV will exceed £1.50 and crucially the CAP will kick in with £100m of shareholder returns triggered whilst holding £60m of buffer. The discount to NAV will then naturally close rapidly and i will wonder why i didn't buy more.... |
I'd have PSH and CHRY as the 2 trusts I'm most confident in right now. But I don't share NAV concerns here: the portfolio is so concentrated that as long as the top 4 are roughly right you can be confident |
Look at the share price of AFRM, which is the closest peer to Klarna. Look at the growth figures at Starling. I'd be surprised if the NAV isn't very conservative but we need 1 or 2 IPOs to verify that. |
PSH is the one with a great looking NOR chart and also a trust with a big discount to NAV , Another SD free stock too |
maybe but not sure how reliable the figures are as hard to value most of the investments . However , the chart suggests there is more upside to come . |
Stellar results and NAV now 143. This is just a stunning opportunity |
Klarna IPO |
Good piece DP thanks for posting. You should take a look at TMT too, very similar deep value situation. |
That could be the end of Jupiter unless its double counting. |
I wrote a thread on stockopedia about CHRY which I tweeted herehttps://x.com/donaldpond6/status/1749184305547424038?s=46&t=YfR7OyhMlqZLtI-h86iCxA |
I've taken a maiden position here this morning. Big fan of Klarna and Starling and the valuation now looks very compelling. Nicely complementary to my holding in TMT (where the total market cap equates to Bolt which will IPO in 2025 and backblaze which is listed, 40 other stocks in for free!). |
Analysts: Shonil Chande and Alex O’Hanlon
CHRY: Mkt Cap £399m | Share price 67.1p | Prem/(disc) -50.2% | Div yield n/a
Event
Each quarter Liberum’s sector teams list their most preferred stocks on a 6- to 12-month time horizon. Chrysalis Investments and Octopus Renewables Infrastructure were selected by the Alternative Funds team.
Chrysalis Investments –Core portfolio nears summit climb
CHRY’s investment case is underpinned by the potential for accretive stake sales/exits within the core portfolio, with Klarna and Starling Bank amongst the companies considered close to or IPO-ready. There is potential for further augmentation of returns via capital distributions. We have a BUY recommendation with a TP of 118p. Our NAV forecasts do not assume portfolio realisation events. The key upside risk to our view comes from exits achieved at valuations above NAV. |
A couple of big trades around 4pm. Hopefully that's the seller exhausted |
250k sales being absorbed. Looking good for a sustained Move up imo |
Taken a nibble for all the reasons you sayUS second rank tech looks very strong. Can't be long before the IPO market opens up |
 Had a little go here at just under 72p.
It might be too early because of Jupiter, so a close watch and tight stop at under 70p.
It looks like the price is still being held back by a big seller. This type of risk on share moves alot more than this on the back of the US yesterday. There are others out there today like ITM and GROW that are moving double digit percentages higher or close.
Yes they are all different, and most don't bear correlation, but risk on is risk on with these sorts of shares - technical bounce or otherwise.
Yesterday there were three trades of 250k @ 70p and 1m @ 70p
Today there are blocks being dumped at 71.2p: 267k, 350k, 320k ,190k.
Also a 300k @ 71.55p and 250k@ 71.5p. The algos moved on the back of the latter.
The notable thing is that the market is gobbling up these big sells. It gobbled them up at 65p and now chomping through them and moving higher at 70p and price points slightly higher.
Ideally that big 20m plus block from Jupiter gets lobbed shortly and this goes screaming north. The algos will be all over it. Maybe they sell it in bits now into the market with the rest at a higher price point - not sure.
The price has a tendency to come back from recent intraday strength so it might be a quick exit and wait for the big dump too.
Don't know if that is going to happen, but a close viewer here.
All imo
DYOR |
That must be Jupiter lobbing with just under 45m gone through at 65p.
They held 76,694,879 on the last disclosure, notified on the 13th September of this year, with the 13% threshold crossed on the 11th September.
Just typing this up and another 22.75m has gone through.
Looking for a possible trade here, but it really needs to break 72p. I think the 45m block has been picked up in pieces by various shareholders with someone taking 22.75m, but I can't decipher that properly - might be too early. Need to see more trades. If it is just 45m of the 76.7m they held, then clearly an overhang still in play.
Nonetheless, watching the book and any key price points on the chart to see if there is any movement on the clearing of Jupiter. If the market is willing to buy like this at 65p, then 65p could be the short term floor, even if it just farts around here.
Worth a watch.
All imo
DYOR
UPDATE: 12/12 13:19
RNS just out to show Jupiter have cut down to 27,472,035 so the 45m and some other bits have been lobbed but still a fair wedge left, if the lot have to go. The market isn't moving on price but watching in to see if the remainder get lobbed too. |
I rather agree riskvreward that it is just one holding, a pity. Of course if one holding can go at a premium then so might others. There doesn’t seem to be much going for continuing in business. Wind everything up near NAV and move on perhaps. |
 Chrysalis Investments has said it has "visibility over a likely disposal” at a valuation that would imply an uplift of approximately 5.5p to its September-end net asset value.
In a stock exchange notice on Tuesday (5 December), the trust said the completion of the disposal, which is subject to conditions, is likely to take a number of months, with a further statement set to be made "in due course".
Ewan Lovett-Turner, head of investment companies research at Deutsche Numis, said the potential disposal was a "significant positive development" for the trust, which could deliver a 4.1% increase to net assets, or £33m.
Chrysalis' managers Richard Watts and Nick Williamson recently announced they would be departing from Jupiter Asset Management in March next year to focus purely on running the investment trust.
In the recent portfolio update, the trust did not mention what investment the potential disposal relates to, and Lovett-Turner said there was limited disclosure at this stage, with no press reports that might point to a transaction.
"We would expect future announcements to shed more light on the company, when disclosure restrictions allow," he said. "We currently do not know the level of proceeds that is expected to be delivered, with only the uplift to net asset value disclosed.
"We believe this would be well received by investors, although we note that the transaction is expected to take a number of months, and therefore it will be some time before capital returns will be considered."
Iain Scouller, analyst at Stifel, said the announcement might be to flag "some good news" ahead of shareholders making their decision on the trust's continuation vote set for the first quarter of 2024.
"Normally, such an announcement would be made when a sale had been agreed, with the company named and some timing given on when completion is expected," he said.
As of 30 November, Chrysalis had £32.8m of liquidity, including an £11.7m position in foreign exchange financial technology company Wise, the trust said in today's notice.
Lovett-Turner noted that with cash of about £20m, plus £12m in listed holding Wise, the potential transaction's uplift alone would take cash levels above the £50m buffer.
Above this buffer, the board is intending to prioritise distributions to shareholders, using its buyback authority, under its proposed capital allocation policy, he added. |
Agree..I expected more bounce, we are at a big discount to NAV and yet for at least one investment we should clearly be at a premium to NAV. |
it reads to me like that it is selling one of the portfolio holdings at a price higher than its 30 September valuation by an amount that will lead to an increase of 5.5 p to the NAV per share. |
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