Good Energy Share Discussion Threads

[rob762243] 19/11/2024 14:26

Always suspicious when it suddenly rises for no reason, it's as if people know something we don't and it's normally followed by good news

[edmate] 19/11/2024 11:29

Hmmmm. Looks interesting. Its been down and/or subdued since the initial offer annoucenement. Could be something, could be nothing. But only 6 days until offer period expires...

[smokeyjohnson] 19/11/2024 11:25

Bid up from 335 to 350 on very little. Sucking people in or something occurring?

[chinese investor] 14/11/2024 07:48

It's Gone Quiet !

[edmate] 13/11/2024 16:49

tanking lower because no update

[edmate] 11/11/2024 15:04

Well, 2 weeks to go until offer deadline. Hope it's confirmed one way or another soon and doesn't end up being one of those long drawn out ones..

[disc0dave46] 09/11/2024 16:32

EdThanksYour expectations seem reasonable IMO.Any offer suggests someone sees value here.

[edmate] 09/11/2024 12:40

Yeah good analysis DD. Personally I think somewhere between 500 to 600p. I'd be pretty happy with 550 upwards. If it happens at all. I'm happy to continue holding even if it doesn't..

[disc0dave46] 09/11/2024 12:08

EdIt's really just as you say, a guess.Brokers consensus target price is 550p.Going on earnings from the 2021 400p bid and their FY24 and FY25 comparative earnings forecasts it could be 600p to 800p. Depends on how much Esyasoft want the business.Brokers cut their FY24 eps forecast by c 4% following the interims (which weren't brilliant) but maintained FY25 eps forecast. The latter (FY25) being a significant 74% uplift in eps versus this FY. Thus IMO a 800p offer could be justified on that basis if there's confidence in the FY25 forecasts. But an "offer" is more likely going to be lower, who knows, pick a number!.The market seems to be saying Vince will block, another definite probability IMO.

[edmate] 09/11/2024 11:38

Discodave what would your estimate of an offer price be?

[disc0dave46] 09/11/2024 10:55

Nobody can estimate with any accuracy what the offer price will be, or what the likelihood of a range of prices are. Sorry but your evaluation doesn't make any sense, you are suggesting based on numbers and very dubious probabilities plucked from thin air that 447.5 is likely, yet an offer price marginally higher at 450 you only think has a 10% probability, so the likelihood of there actually not being a formalised offer is 90%.Sorry but your views were logical and would agree with some of your points but the numbers are pure fantasy IMO. You'd previously posted up you think 500p to 600p but now you say only a 5% probability of 600p and surprise surprise 20%, the highest, for your guess of 500p, but still a very low probability, shouldn't that be say 80% anyway?

[rogash] 09/11/2024 10:08

Can anybody tell me why the interims were so poor?

[mammyoko] 06/11/2024 09:34

In the absence of a figure for the indicative proposal, the share price here has reached the boundary of market makers' imagination - i.e. it has increased roughly 25% from the circa 290p undisturbed price. In the absence of any inside information or the release of further public information, it seems unlikely that the share price will increase from here and may even drift back to around 340p.

Based on my estimates of the respective probabilities of different take-out points including factoring in a fall back to around 300p in the event no bid is forthcoming, I would say that, at the current price, the market is effectively over-discounting the probability of a high take-out price. The fundamental reason for this is that unlike many other bid situations where the uncertainty about the probability of a bid going ahead is largely about the take-out price, here we have a blocking shareholder who is a direct competitor. On the one hand we have a wealthy bidder seeking to enter the UK market who knows that, baed on previous bids, they are going to have to make a knock-out bid to succeed. On the other hand we have a blocking shareholder who will be fully aware of the threat that a well-funded competitor could be to his own business and who may be more than normally motivated by ideological considerations rather than the pure profit motive. Against the latter are that GOOD ia already a well-funded competitor of Ecotricity's and that he has publicly spoken about selling Ecotricity itself quite recently.

Consequently, I see the current share price as allocating too much probability to either no bid or to a bid that is too low to make sense in the context of Vince's failed bids and too little probability to the possibility of a high take-out bid. I don't see that changing because, as I say, it requires more imagination from market makers than my experience of their boundary of imagination allows.

For discussion, here are my calculations of the probabilities of different take-out prices that suggest the current share price significantly underestimates the overall probability-weighted share price. I accept that there are multiple other scenarios which would produce a different and lower result. But I suspect, knowing how the small cap market works, there are few people out there who have performed a similar probability-weighted exercise and the price is being set by current very low levels of trading. It would not, consequently, take much volume to push this higher up to, say 400p but, as I say, in the absence of any inside or public information, I don't think it could go much higher.

I have allocated only quite small probabilities to much higher take-outs but I do see this as a special situation where a well-funded bidder wanting to enter a market comes up against a shareholder who has both ideological and competitive reasons to block the bid. Hence, I would say the probability of a very high take-out price here is significantly higher than in other bid situations. Given that the company is cheap, has expectations of future growth and a large stake in a market-leading tech business, I see further reasons why a high take-out price should be allocated higher probability than normal.

This is why, at 350p or below in the absence of any further information I will continue to take the bet that Vince will sell for the right price and that that right price could be much higher than the market is currently anticipating.

Share price [A} Estimated Probability [B} Probability weighted [A x B}
290 10% 29
300 25% 75
310 5% 15.5
360 5% 18
450 10% 45
500 20% 100
550 5% 27.5
600 5% 30
650 5% 32.5
700 5% 35
800 5% 40
Prob weighted share price = 447.5

[chinese investor] 04/11/2024 16:22

Good Rise !

[mammyoko] 01/11/2024 19:03

I do hope so. Will be continuing to buy next week if it does

[edmate] 01/11/2024 09:38

Going to drift lower and lower longer we don't have clarity..

[mammyoko] 31/10/2024 11:52

Is there any real prospect that Vince - a JSO funder - will agree to sell his blocking stake to oil-rich Abu Dhabi? Cracking headline for the Mail - 'Dale Vince uses 20m from sale of stake in Good Energy to oil sheikh to fund Just Stop Oil'. Perhaps he would enjoy the irony of that?

[c_k] 31/10/2024 09:48

I note that Andre Fernon has taken a 3.1% stake. I haven't been a shareholder long enough to know whether he has been a shareholder previously but see he reported a previous 0 holding yesterday. He is the co founder of Terra Solar in Ireland. Good to see buys from industry figures at this price level

[basem1] 30/10/2024 08:20

Not really We closed 390-400 last night The uncrossing trade was very low last thing yesterday

[chinese investor] 30/10/2024 08:08

Good Start !

[edmate] 29/10/2024 18:06

Yeah agree with that. Needs to be sorted and clarified quickly or people will lose interest, but I don't see it going back to as low as 300p though. Not with the prospects and quality it has as a standalone and being a sitting duck for takeover...

[mammyoko] 29/10/2024 17:42

Don't think we will have long to wait here either way. If the bid isn't credible then perfectly polite to rebuff it tomorrow. If credible and founding shareholders and Dale are on side at the indicative price then also likely to be announced this week.

Delay only likely to arise if Dale is also interested in tabling a bid and wants to make it difficult for Esaysoft. There's no love lost between him and the BoD so they're not going to bend over backwards to assist him. But losing out on Good to a well-funded new entrant to the market Amy be unpalatable. Given that he's unlikely to be able to justify competing on price as Good is worth much more to Esaysoft than him, he will want to extract as high a price as possible from them for his blocking stake. Now that the price in the market has risen to 400p and that that's potentially justifiable by Good's prospects as a standalone, it's not hard to see that the BoD could be pushing for 600p here.

Any delay past the end of this week will likely mean that Dale isn't on board and then I could see it all falling over and back down to 300p

[edmate] 29/10/2024 15:31

IMO regardless of whether the bid arrives or not, EPS from the 2 acquisitions plus the organic EPS already being generated is well deserving of a 400p+ valuation on a reasonable PE ratio. So this is a win either way. Its such a well timed announcement aswell that I think (and hope) will budget-proof the price as it is being propped up by this potential bid. IMHO DYOR

[mammyoko] 29/10/2024 15:22

Not impossible to imagine a 600p offer here. If Esaysoft are serious they are going to need to offer something appealing to a BoD that rejected a 400p as materially undervaluing the company's prospects at a time those prospects weren't as clear as they are now. Also to prise Dale's holding away from him. The co-founders remain as significant shareholders and will be backing Pocklingtom to hold out for a price that fully values the future potential.

Of course, the risk is that they push too hard and Esaysoft decide not to bid. But at a forecast EV/EBITDA of only around 3.2x for 2025, there's plenty of room for a group of Esaysoft's size to bid up

[mammyoko] 29/10/2024 10:26

Indicative bid must be at or near 500p for the BoD to announce that they are even considering it. Otherwise they would have just sat on the approach as so many other companies do and then announced that they had rejected it as undervaluing the company's prospects.It's possible that Esyasoft could have been badly advised to submit an offer that had no likely prospect of being accepted by the BoD. Given that Dale was willing to pay 400p himself, it seems unlikely that he would accept anything under 500p (and probably more) to sell unless he wanted to move on.

Hence, this has the feel of two possibilities a) a badly advised non-credible approach certain to be rejected by both the BoD and Vincent at something under 400p or b) a knock-out bid at something considerably higher than 500p which has been pre-approved by Dale and which the BoD feel obliged to consider properly. Given that Esyasoft are a credible player looking to enter the UK market with buckets of cash behind them, it would seem that b) is the more likely option. Obviously, if it turns out to be a) then the price is likely too drop back to around 300p. But given the upside is 500p or better, the risk/reward looks quite good here for a share that has plenty of potential to grow anyway.

Hence, I am adding at the current level and will continue to hold in the absence of a credible bid.

There is always the possibility that a less than credible bid is backed up with a threat from Esyasoft that they will enter the market anyway and compete using their buckets of cash. But I don't see that as a particularly credible threat.