Digital 9 Infrastructure Share Discussion Threads

[skinnypope] 18/3/2024 13:20

I'm not sure why there was a thought that the deal closing RNS would rally the share price? The deal was already done, as confirmed by the Icelandic regulatory approval.

Maybe 0.5p - 1p relief rally as D9 didn't drop the ball, but that would have been the absolute maximum IMO.

Against that, as stated in the last two posts, is the very large transaction charges of £17m [2p per share] as well as the VAT indemnification provision of £23m [2.6p per share]

Both of these items were of course expected, but probably not in that size, so share price down on the day makes some sort of sense to me, as those two "surprise" items outweigh the "relief rally".

Looking ahead to "please-make-the-SP-go-up" news we need:

1. A Verne power agreement signed to confirm the release of the Deferred Consideration [$25m]

2. Insurance taken out for the Verne transaction VAT indemnification, against which part/all of the £23m provision can be released

3. Valuation report released [see my previous post]

[bagpuss67] 18/3/2024 13:07

Yes. Huge fees. VDD maybe £500k,legals same? So mostly a massive fee for GS.l?Any decent accountancy firm M&A team could have got this away for much less IMHO. They don't need GS to wind this up. Yet more value destruction??

[cc2014] 18/3/2024 13:00

I suspect there has been a realisation that the remaining assets are going to be crystallised at lower prices, that it will take considerable time to crystallise them (Arqiva) and the costs involved in the crystallisation are considerable.

I mean £15m for fees to sell Verne for what I see as a fairly basic transaction?
On that basis the fees for Arqiva which is far more complex are going to be, well I have no idea but £30m? I know that sounds inconceivable but how did they spend £15m on Verne? (and one wonders who exactly got paid what?)

[riverman77] 18/3/2024 12:22

To put current share price in context - this was trading at 43p prior to the announcement of the Verne sale. The market understandably didn't like the terms of the deal and the price dropped to around 32p. The shares then drifted ever lower over the next few months on fears the deal wouldn't go through and DGI might run out of cash, falling as low as 17p. This all seems perfectly logical, if a little harsh. What doesn't make sense is the share price still stuck at 23p even though the deal now completed and liquidity risk removed - surely at the very least it should be back in the low 30s when the deal was first announced - there doesn't seem to have been any other adverse news that would justify a near 30% drop from those levels.

[invisage] 18/3/2024 10:38

Oak Bloke:

"These assets are plays on the growth of the internet, data and AI. When Nvidia is shooting the lights out in its progress and financial performance these assets are backed with gusting tailwinds."

hxxps://theoakbloke.substack.com/p/dgi9-fy23-update

[cc2014] 18/3/2024 10:35

Because sadly Keith when I commented on OB's analysis some time ago on this thread, I was told very clearly and very quickly I didn't know what I was talking about.

This of course is the usual response to anyone writing anything negative on threads which are popular with PI's and have been tipped by every by everyone under the sun.

So, in general I don't bother. People don't want to hear it. It's a pity because there are some threads on ADVFN where it is possible to have a proper discussion about a share and these have made/saved me money


Over the years, I have seen many of these share "gurus" come and go, whether they have been tipsheets or on twitter etc. What I always consider is why they are writing so many pieces and what their motivation is.

OB is better than many because he provides some depth to his analysis, but he's writing too many articles and there are too many fundamental mistakes which shouldn't be there.

[keith95] 18/3/2024 09:21

"The Oak Broke also thought SED was a great company."

Inadequate to be critical of a person on their view of DGI9 because of the company SED. For credibility why not work through OB's numbers and come up with a revised figure that we can comment upon or else be quiet.

[cc2014] 18/3/2024 09:09

And one should not forget OB started tipping DGI9 at around 40p.

[glavey] 18/3/2024 08:55

The Oak Broke also thought SED was a great company.

[cc2014] 17/3/2024 18:31

rofl. How much credibility do you want to place with anyone who thinks the NAV at 100.13 is "totally genuine"?

[apollocreed1] 17/3/2024 14:40

I only noticed the RNS after market close, otherwise I would have bought more.

The Oak Bloke on his blog seems to think that the NAV is totally genuine so potential upside is huge.

[salpara111] 17/3/2024 14:35

Been tracking this for a while and when I saw the RNS on Friday morning I thought I had missed the boat! very strange reaction and now I'm entirely unclear what to do.
On the face of it there should be at least 30p after all the excessive fees which would be a great return from the current price.

[misterd1] 15/3/2024 15:52

Exactly Invisage

Albeit, like William I am surprised by today's price 'action'

[invisage] 15/3/2024 14:45

Patience is a virtue.

The value in DGI9 will come in lumps IMO.... When they make sales the share price will spike and the value will be distributed in the form of shareholder returns....

The main reason the share price does not advance further is lack of institutions buying if any. Small private investors dumping into spikes but not really understanding what DGI9 is worth.

To get max value we need to see out the process of asset sales and realisations, which means being patient and let it play out.

Even if we got 50p over 1-2 years that is a decent return.

[williamcooper104] 15/3/2024 14:44

Wow Down on the day Guess it's buy rumour, sell fact and that it's likely to be a long wind down with our favourite muppets captaining the ship

[wskill] 15/3/2024 12:52

Nothing will ever be done by the FCA reading a report when a CEO in the Connaught income fund reported financial misconduct to them they turned a blind eye to it,It could have stopped the fraud in its tracks .No I think they are in place to assist fraudsters in their efforts .

[alan pt] 15/3/2024 12:20

"other Investment trusts run by them"

Surely you are not questioning the quality of TENT and SOHO? :)

[wskill] 15/3/2024 11:17

Yes I am not perplexed by todays price action just part of being invested in the UK ,battered on all sides by hedge funds who can manipulate the market as they like then the FCAs total lack of action whatever happens .

At the very least over very poor management here Triple Point should be reprimanded and other Investment trusts run by them should be gone over with a fine tooth comb.

[williamcooper104] 15/3/2024 11:12

Indeed strange reactionSentiment on this couldn't be worse Not surprised by GS fees but they've had months to get a W&I policy so can't understand why they haven't - and if they haven't then likely because there's a problem which won't be fixed soon

[chucko1] 15/3/2024 10:16

The frictional costs were certainly high (hardly unexpected), and the tone of the management statement somewhat defensive. But even given that, recognising that the company has dodged an existential event, together with a "proof of concept" of further asset realisations, I still wonder if certain hands are simply delighted to have an opportunity of getting shot. That is little more than a guess, but not out of line with other things I have seen either during COVID or as interest rates have gapped higher.

[riverman77] 15/3/2024 10:14

Yes one of the most irrational reactions I've seen, and I've seen many. The only reason this was trading on a 75% discount is because of the risk this deal falls through and the company runs out of cash. That risk is now gone so simply no reason it shouldn't trade at 30p as a bare minimum, with considerable further upside once further sales agreed.

[alan pt] 15/3/2024 10:01

Well, I'm somewhat mystified by that market (non) reaction

Maybe everyone waiting for the new valuation?

[tsmith2] 15/3/2024 09:59

very subdued reaction so far

[riverman77] 15/3/2024 09:03

Yes we all knew they'd get ripped off by Goldmans, but had already factored in their extortionate fees. Suspect it will need another sale to drive the share price meaningfully higher (ie back above 40p).