Galileo Inn. Share Discussion Threads

[fozdad] 28/2/2003 08:35

HP, this is like deja vu, the same conversation happened a couple of weeks ago.

From the RNS....

"Galileo Innovation plc, the Cheshire-based business accelerator, is to become
the first UK PLC to pay its dividend as 'in specie' shares in investee companies
that go forward to an IPO. Galileo has already identified five investee
companies for which an IPO is a possible exit strategy. In such cases, a
percentage of shares in the newly listed company will be distributed to Galileo
Shareholders."

It does not say that they have invested in 5 companies, merely that they have identified 5 companies for which an IPO is a possible exit.

[sreddy] 28/2/2003 08:31

See what I mean HP, you confuse yourself.

The 1.5m is in the 2m. What is so difficult to understand?

[hugepants] 28/2/2003 08:24

How can they have 3M of 'unfettered cash'. They've already invested 1.5M in Sense-Sonic alone. And I see you are assuming the RNS detailing 5 more investments is not to be taken seriously. I think thats a big assumption.

[sreddy] 28/2/2003 08:15

Ps. Well done to those of you who bought at c.1.6p. That is like buying liquidation cash at 45p in the pound, or on-going net assets at 15p in the pound. You bargain hunters, you!

[sreddy] 28/2/2003 08:12

The investments aren't in the books at anything anyway, and if they go down (and I'm not saying at all that I think this is a likely scenario), and thus the cash-backed overdrafts of, say, £2m are written off in full, then there is still £3m of unfettered cash left. This is 3.4p per share. Some downside scenario!

[hugepants] 28/2/2003 07:54

sreddy, there is doubt on the number of investments made. The RNS made in June (july?) stated 5 more invesmtments were being made (cash-backed guarantees). I have to assume they have now made these investments. What else can you do?

I dont agree with your assumptions on cash position and on the risk profile of the investee compnaies. IMO the investments are very high risk and in danger of being written off completely if the floats dont happen.

[sreddy] 28/2/2003 07:47

HP,

You've just made up 3 of those questions to introduce uncertainty which is just not there.

1. We know exactly how many investments have been made. They have been announced. FCS, SDL, SS and A.

2. The cash is not difficult to predict +/- a few hundred thousand, depending on interest income and fees. The restriction on availability comes from the security deposits, but this only limits new investment.

3. It is not difficult to work out that it would be better to release the results after, if possible, demonstrating the value of investments which are in the books for nothing by establishing a market value on flotation. If this does not happen, the results will just show the cash of £5.5m +/- the net admin costs after interest and fee income, less a few short-term creditors as shown in the interims. Why is that so difficult to work out?

Yes, there is much uncertainty about the timing of the floats, but if the company had not made the announcement in November, then this would not have been seen as much of a problem as no-one would have been expecting floats in the recent market conditions. As to the conflicts of interest, these arose before GAI was floated a year ago. The fact that the directors of GAI have interests in some/one of the investee companies could be seen as positive, showing their faith in the companies.

It is the illiquidity of the share in uncertain times that is the real problem, but as I have said before, this can lead to some real bargains in the market-place, especially if people are over-egging the difficulties.

You can find other companies at a discount to cash, but many are real loss-makers and this is being factored in. In GAI you have a company trading on a MASSIVE 75% discount to cash and probably much bigger discount to net assets, including investments at any sort of prudent valuation. And the company is probably only marginally loss-making if admin costs are not completely covered by interest and fees.

A bargain and special situation? - I think so.

[swiftnick] 28/2/2003 07:30

HugePants,

Agree absolutely with your post. I have made a small investment in this company, but until these questions are answered I will not be increasing my investment however low the shares go.

Why is it you can never find a good plumber when you need one?

[hugepants] 28/2/2003 07:03

This MAY be worth a small punt (although not by me) but why pile into this big-time when there is so much stonking value in the markets just now in much safer stocks?

There are just far too many unanswered questions now with this company. ie. when are the floats, how many investments have been made, how much cash is left, why are GAI investing in companies where there are clear conflicts of interest? why no results? etc etc. This is a gamble, not an investment. IMO.

[chaz99] 27/2/2003 20:17

Sreddy, I know it was not a 'T+' trade. But I've known co's, such as OSH where a large 'T' trade precedes days of selling from someone [big] who wants to get shot of their entire holding. I was just thinking aloud really,

Regards

[sreddy] 27/2/2003 17:32

Buy's of 576k seem to have mopped up most of the 621k sale. Price drop is a reflection of the fact that mm's don't want to hold stock and if the seller is willing, they can afford to drop price dramatically to move the stock on to bargain hunters and make a tidy sum in the process.

Trades keep coming in. I reckon the 300k is a sell as well.

Just wait and see the price rise quickly when the trend is reversed IMHO.

[sreddy] 27/2/2003 17:26

chaz,

A 'T' trade is a protected sale built up piecemeal throughout the day and posted in total at the end of the day. Often happens with large transactions well above the market size. It is not a T10 type deal. Nothing sinister in the fact it is a 'T' trade.

[chaz99] 27/2/2003 17:16

'T' trade aswell, that can't be good

[mothball1] 27/2/2003 17:12

What do you all make of that? 250k deleted 621k sell.

[sreddy] 27/2/2003 17:11

Well now that really explains it - 621,000 dumped at 1p. I hope they end up regretting that sale.

[safman] 27/2/2003 16:51

good luck sreddy.. NSB a v. good one.. mind u...

[moneypit23] 27/2/2003 16:48

Well if that was a sell at 1.5 I couldn't really ask for much better than the 1.6 I paid. Never know sreddy, I may even overtake your stake soon (In my dreams!).

[sreddy] 27/2/2003 16:45

And I'm banking on bravery being rewarded handsomely in due course. With AIM taper relief reducing the taxable gain significantly.

[safman] 27/2/2003 16:42

87 mill shares in issue.. therefore illiquid stock.... have they given a date for the floatations.. in these market conditiond you;ve gotta be brave...

[sreddy] 27/2/2003 16:38

There we go, there's one 250k sell at 1.5p. Amazing how a £4k sell has so much effect. Just think what will happen with some £5k buys when things become clearer to the market.

Safman,

I definitely think it was a sell, given the effect on the price and the corresponding buys at c.1.6p.

[safman] 27/2/2003 16:37

who bought at 1.5p..250k

[moneypit23] 27/2/2003 16:30

ok I caved in.

[safman] 27/2/2003 16:28

this ones tempting....

[eurofox] 27/2/2003 16:28

just got a few more

[moneypit23] 27/2/2003 16:25

Nearly tempted to pick up another 125k @ 1.6 but decided to leave it.