Mbl Share Discussion Threads

[curvedair] 18/10/2011 10:55

Things are looking up at cashbee.com, sorry I meant bee.com this morning. They are only 3 out of their Top 10 out of stock. Well done!

Davidosh...your comment suggesting that MBL may trade with cashbee.com is interesting given that they appear to be direct competitors. If this is the case then it shouldn't be encouraged. Am I right in thinking that MBL are still in the entertainment "wholesale" business. I know of 3 companies that have approached MBL recently to buy stock,thus relieving them of redundant overstocks, and on all 3 occasions they have been ignored with not even a phone call or email with an explanation or common courtesy "no thanks". While I appreciate MBL are under no obligation to respond I am not sure this is the right conduct given MBL's current position. One offer I am told was a handsome 6 figure sum....which given the current climate, particularly in the entertainment arena, most people would jump at the opportunity. Maybe you would like to quiz MBL about this, but as usual no doubt they will come up with a "1/2" answer like they usually do and those that are gullible amongst us accept it as read. Remember the Olympic Tickets....what's happened to these?

[davidosh] 17/10/2011 15:50

I certainly do not get them all right and things can change at many small caps especially. I did call this right for about two years before it turned to dust though. In that sense many had time to change their view much quicker than me as the size of my holding was, and still is, too large to sell overnight.

[mr hangman] 17/10/2011 15:48

lol, yes but GBR it's all still to play for

[effortless cool] 17/10/2011 15:40

Yes, he should have joined us in GBR.

[mr hangman] 17/10/2011 15:39

This has not been one of Davids better tips...i did warn you lot

[effortless cool] 17/10/2011 15:22

David,

I try to always take a prospective view on investment, and not to worry about cementing a loss, particularly if I feel that management have let shareholders down. I do take your point that downside is so limited, you might as well let it run. (CGT position is important here too - maybe next year it's gone up and, if not, maybe next year is better for the CGT offset).

Anyway, I'm not a holder and am muddying the waters here, so I will now revert to lurking.

[davidosh] 17/10/2011 14:37

Just for the record...I have checked and Cashbee is not linked or registered to MBL in any official way though they may trade with MBL of course.

Effortless Cool....You may not feel the trust is there to invest new money. That is quite different of course to having enough trust to see a return from here rather than cementing a loss at this point if already invested. There could be very significant upside for a number of reasons. The downside is fully known from here with a market cap at less than £2m

[effortless cool] 17/10/2011 14:26

DesWalker,

That's an interesting perspective on valuation, although not one that I would adhere to.

Regarding the first part of your calculation, it's not clear to me that this is significantly in excess (which is presumably what you mean by 'a multiple') of the current share price. Where will assets be after write-offs? Can the remaining assets deliver a profit after overheads? I don't know, and I haven't tried to work out the answers - presumably you have?

On the second part, I don't think its binary - it's a continuous distribution between 0 and 1. I suspect that no management team is saintly enough to get a full 1. I certainly wouldn't place MBL right at the zero end of that spectrum either - in fact, given the attention that they have brought upon themselves, I'm sure they are currently moving further away from 0. However, I simply would not, as a rule, invest in a company where I did not have a high degree of trust in the management (> 0.75, say, using your methodology). For me, MBL management would not pass that threshold.

Best of luck in any case.

[deswalker] 11/10/2011 13:01

Effortless Cool,

Clearly there are two parts to valuing the share.

The first part involves valuing the continuing businesses based purely on prospective future earnings/losses and net tangible assets and forgetting all the issues linked to management and ownership structure. Personally I think it's clear that this valuation is a multiple of the current share price

The second part is pricing a binary bet (1 if correct, 0 otherwise) that the current management team will act to realize the first valuation for the benefit of all shareholders.

The correct valuation is these two figures multiplied together.

You would probably price the second part (and hence the product of the two parts) at zero (no chance whatoever) which is presumably why you would be a seller at any price.

However my valuation for the first part is 50p and for the second part is 50% giving a current fair value of 25p. You'll probably laugh at my 50% likelihood that "they'll do the right thing" and I would have done likewise a few months ago. But IMO things have improved somewhat over the last few months not least through all the exposure of the issues and the actions of various larger shareholders.

Hence my current fair value for this share is 25p with as much possibility of 50p as zero. At 11p it looks like a hold at least to me.

Des

[supernumerary] 11/10/2011 12:43

Windsong looks like a very interesting little business. Why does everyone want to sell it? What do you see mubl doing when the current fuss has died down - a chain of dvd/game shops? Surely not.

[effortless cool] 11/10/2011 12:18

Regardless of speculation on 'the real NTA', the key question here is surely whether or not you trust the people who run the company, both in respect of inegrity and of competence.

If you do trust them, then speculate away; if you don't, you should surely sell.

I don't hold but, if I did, I'd be a seller.

[deswalker] 11/10/2011 12:10

Here's Sainsburys take on the deal ...



Luke Jensen, Sainsbury's Group Development Director, said: "Online retailing and the delivery of digital content will play a key role in the future of entertainment so this is an important acquisition for Sainsbury's. Taking full control of Global Media Vault Ltd will enable us to develop our existing Sainsbury's Entertainment website even further enhancing the functionality and customer experience, meaning customers will soon be able to buy, rent or stream content from Sainsbury's.

"The acquisition also represents a significant time saving when compared to building a platform from scratch ourselves. Securing this platform for Sainsbury's Entertainment shows how we are constantly looking to innovate and seize opportunities that will support the future growth of our business."

[cockneyrebel] 11/10/2011 11:56

I'd say while that little lot was in assets as Global Media Vault the directors couldn't lose it. Now they have £1m in cash to fritter away on all sorts of things like warehouses, chains of shops, restaurants, tickets for the Olympics etc, if they so felt like it.

Cr

[deswalker] 11/10/2011 11:32

fft,

PC said something similar at the AGM as there are all sorts of write-dwowns going on linked to all sorts of stuff so I agree with you that a post GMV disposal NTAV per share of £1 is totally fanciful. However with the share price at 12p there are some very large write-downs already priced in !

If the Morrisons situation can be resolved without too much further pain and the downsizing completed effectively then it's hard to believe that the remaining businesses and assets aren't worth a multiple of the current share price Windsong is a growing niche business so ought to command a decent valuation and I'd be delighted to see that one sold next.

Des

[fft] 11/10/2011 11:06

Des,

PC mentioned at the end (or was it after ) the meetiing in London before the AGM) that the net asset values in the AR report were completely out of date and bore no resemblance to current reality. This was in response to an estimate provided by an investor as to the buy out amount should TA decide to take the company private.

Therefore, i am not surprised that GMV had net liabilities, and i suspect any upshift to NAV figures is a finger in the air job. getting rid of GMV for 1m could be quite a good result - assuming the RNS is accurate (not a MUBL striong point !)

However, if windsong was sold for a few million and U-xplore was sold for even half of its new value (though PC alluded that that new valuation may still be slightly optimistic), and the stock just went for a quid a DVD (that could be optimistic when you see what the remainder shops in Huddersfield sell new DVD's for !), then it should give a valuation of 40-50p - assuming there are no really nasty debts elsewhere in the company.

[rbcrbc] 11/10/2011 10:44

So did Sainsburys take on any stock as part of this deal ?

If so, how much was MBL inventory written down by ?
If not do they have a supply agreement ?

[davidosh] 11/10/2011 09:00

I wonder how many employees will have been transferred to Sainsbury responsibility under this purchase agreement too ? There was a whole team at the MBL HQ dedicated to answering customer enquiries and fulfilling the orders for example. The Sainsbury Entertainment website will be about to start their busy period so no doubt wanted to get the deal done and do their increased marketing without MBL.

[deswalker] 11/10/2011 08:56

Does today's news really mean a NAV uplift of 28p per share !? If so then combined with the 72p NTAV announced in the results we may well be looking at something approaching £1 per share NTAV. Lots of haircuts to come off since then but the current share price is at quite a discount !

[deswalker] 11/10/2011 08:53

According to page 27 of the AR the Digital and eCommerce Division (comprising GMV and bee.com) had net assets of £1.956mill. Today we are told that at this date GMV had net liabilities of £3.9mill. If these figures are true then this implies a NAV for bee.com of approx £5.9mill. Maybe that is right but the net liabilities number announced in today's RNS is a surprise to me. Great news if so ...

[davidosh] 11/10/2011 08:43

Excellent news as I think most were expecting this division to be sold off for a very token amount as it was not profitable and Matt Porter had already exited. How do those liabilities square up with the amounts shown in the AR ?

[deswalker] 11/10/2011 08:14

And the share price ticks up a quarter penny. Perhaps everyone is still out cold from the shock.

[fft] 11/10/2011 07:10

GMV sold for 1m to Sainsburys.

That is half the market cap. Lets hope that TA doesnt take it as a bonus for having done a great job :-)