Internet Business Share Discussion Threads

[kenatbabken] 24/4/2007 16:21

TA

Interesting that they should be talking about the lack of institution,s given
that Barclays have invested recently,As I,ve said before DGM is a factor I,m
sure why Fidelity have,nt taken an interest (A lot of other institutions follow
them) Also it would help if they changed from the Computer and Software sector
into the Media sector (The Bloomberg news story yesterday is an example)

[reggieperrin] 24/4/2007 16:18

I really do not think either of Altium's excuses hold much water. While many funds have rules which preclude them from investing in such small companies there are plenty of specialist funds and VC type funds out there which will. Even big managers such as Fidelity regularly crop up as major holders of AIM tiddlers. And IBG's affiliate marketing model is not hard to understand (even I got it at the third attempt when the shares were 2p) and big internet companies such as AOL and Google have been looking to acquire in the industry of late so it can hardly be considered marginal. I would say the real reasons for lack of institutional interest have been poor presentation of and communication by the company and its brokers (even the last results had a couple of statements in - such as the seasonality issue - which left me scratching my head and wondering why on earth they did not elaborate) and concerns over corporate governance arising from a lack of non-exec directors and the major shareholder also acting as CEO and chairman.

"The chap from Altium was saying that institutions now rarely invest in small companies with a market cap of less than £50m and that was preventing investment. Then later, they were saying it was because insitutions do not understand the business model."

[the analyst] 24/4/2007 15:57

A lot of the conversation revolved around that fact that institutions have not been buying in. Maz appears very frustrated by this. Very frustrated indeed.

The chap from Altium was saying that institutions now rarely invest in small companies with a market cap of less than £50m and that was preventing investment. Then later, they were saying it was because insitutions do not understand the business model.

If it's the former, I'm very surprised as I have seen plenty of institutions buying small caps over the past year. If it's the later, then imo, the problem could be in the ability of whoever is presenting to the institutions.

Perhaps whoever does these institutional presentations is highly skilled in a number of areas, but not in that type of thing? the lack of institutional support seems really odd to me. I wonder how much technical training they have received in presenting to institutions? Perhaps their conservative nature acts to hinder them in such situations?

Just to compare, even MDC have had success on their recent rounds in the city (before the latest profit warning) and they have a very low market cap, never mind how horrible and difficult to understand their business plan is.

[the analyst] 24/4/2007 15:44

I'll have to clarify that a bit - a lot of what he said was so slow and guarded that it was very difficult to guage what he was actually implying. I think what it meant was that in appointing Altium to formally assess the options, they have been or are in the process of approaching various companies that they think IBG would be a good fit with and discuss valuation and potential acquisition. You could be right hirsch.

It's also a possibility that the whole thing is an attempt to raise the share price so IBG can make acquisitions using their shares without so much dilution.

Maz still appears very committed to the company.

[hirschnathan] 24/4/2007 15:38

Ta if thats what maz said, it could either mean, lets see the full value of ibg, or it means I need a break and any offer gets it

[omlaysause] 24/4/2007 15:27

"Maz seemed to be saying that they were contacting potential buyers rather than the other way round"

That makes a bit more of a difference!!

[the analyst] 24/4/2007 15:13

Measurenguy, no names mentioned, Maz seemed to be saying that they were contacting potential buyers rather than the other way round. Very hard to assess what has happened of late that has caused yesterday's announcment imo.

Maz was asked why the move to a new office if they were assessing the possibility of a sale of the company. Maz said he sees this as a real asset to any potential buyer that would like a London office. The move to new offices cost about £200k.

[masurenguy] 24/4/2007 15:07

Couple of 100k share buys have gone through this afternoon but no real impact on the share price so far.

[the analyst] 24/4/2007 15:05

No, he didn't mention a price. He was keeping his cards very close to his chest and the guy from Altium was there to jump in when he needed. There was concern voiced over the fact there is only one non-executive on the board and that the Chairman has gone, because it naturally, raises alarm bells in the minds of investors

Current trading was again re-iterated to be in line with expectations and Maz was quoting figures for growth that should be reached year on year which seemed in line with broker expectations, although he did get a bit confused about the eps figures he was stating.

[omlaysause] 24/4/2007 15:04

Million trades already, looking like people may be getting a little bit more interested. Maybe Maz's statement yesterday has provided the necessary bump this needed. Would be nice to have this sitting close to 40p by the time the interims come out and then I think things will start to motor and push on to the end of 2007.

[masurenguy] 24/4/2007 15:00

Was any reference made at the AGM to potential external predators or acquistors ?

[muffinhead] 24/4/2007 14:59

will not take much to push beyond 30

mm's happy to buy at the mo...big order to fill which may see later as T

[hirschnathan] 24/4/2007 14:54

Did he indicate the sort of price he would be happy with?

ANything interesting with current trading?

[12345th] 24/4/2007 14:49

Many thanks analyst.

[the analyst] 24/4/2007 14:44

lol, it would be at many AGMs 68steve.

Today there were 12 or 13 attending.

[68steve] 24/4/2007 14:38

Record attendance,that would be 3 peeps then;-)

[the analyst] 24/4/2007 14:33

What, you want more than that?

More seriously, my read of the situation is that Maz wants to expand the business in a big way, certainly through moving into new geographical areas, but also through acquisition of related companies that would have synergies with IBG's current offering.

It sounded to me like he would have preferred to do this via acquisition using IBG shares. However, because the share price is so low compared to where the board think it should be, acquiring assets using IBG shares is not an option they would consider because of the excessive dilution it would involve.

To put it another way, if the market cap were higher, lets say for the sake of argument, £80m, then they could acquire a £20m company in south East Asia or wherever, with relatively few shares. However, at current levels it would involve halving Maz's (and our) percentage shareholding. Maz would then lose control of the company to some extent and I don't think he likes the thought of that at all.

So, the result seems to be that, without being able to expand in the way he would like to, without diluting his shareholding too much, Maz is considering all options, including an exit. I get the feeling that he thinks that without expanding, IBG will eventually end up with a competitive disadvantage to other companies that have the ability to easily make acquisitions and expand rapidly.

The possibility of the Directors taking the company private was also discussed and although Maz didn't rule that out, he said it was probably not a viable option.

I'm sure others will have a completely different read on the situation, so it will be interesting to read other peoples views as they get back to their computers. Unfortunately, I'm not well and didn't have the energy to hang around and chat with others from the board. Am back at home now, writing this from bed. Poor me etc.

There was, as expected, a record attendance at today's AGM.

[12345th] 24/4/2007 14:19

News from the agm anyone??!

[the analyst] 24/4/2007 13:47

Interesting AGM. Lasted two hours!

Obviously, most of the discussion revolved around yesterdays announcement. It was revealed that due to being attacked by one of the employees wives every Christmas, Maz is considering all options to prevent it happening again this year.

[68steve] 24/4/2007 13:37

Hmmm,now for the Psychological 30p barrier!!!!!!!

[68steve] 24/4/2007 13:24

Could finish blue,AGM going well???

[reggieperrin] 24/4/2007 12:48

good to see Maz is willing to play ball with potential suitors ... with his large holding ibg would never get a bid unless Maz was open to the idea ... i suspect the sector is 'hot' in the corporate action scene at present and that the house brokers have been tapped up informally ... hence the announcement to see what serious interest there is ...

btw - whatever happened to LRR? ... i am sure i recall he said he had over a million ibg shares and he was always in the the long haul so i cannot belive he has dumped the lot ...