New Star Asset Management Share Discussion Threads

[doorway] 15/1/2009 16:38

yeah it was a exercise to get people to sell...alot did but the price came back because they know its going to be alot higher..it will be a very intresting week or so..

[knowing] 15/1/2009 15:56

Well anyone who sold may have been locked out. GLN looking good.

[doorway] 15/1/2009 11:12

treacle has a short and hes got you panic selling .whats up with you guys...this is a strong buy....when the price and if it gets lower he will ramp it again...dont sell but dyor

[knowing] 15/1/2009 10:57

The thing also to take into account is what is the CFD situation if they delist as mentioned?

[jamie62] 15/1/2009 10:55

exactly - it is all about a bidding war for this one

[mister md] 15/1/2009 10:53

seems a bit daft suggesting to start shorting a share which has already fallen from 500p to 4p over the last couple of years...a bidding war or general market improvement are a couple of reasons not to. Anyway good luck to all, longs & shorts!

[8trader] 15/1/2009 10:38

Well dont say you were not warned numerous times about treacle !

[knowing] 15/1/2009 10:38

Treacle I saw it. Have a look at GLN after toays results. Very undervalued.

[treacle28] 15/1/2009 10:30

Found this out on Share Crazy this morning Knowing....good luck mate.

Fallen Star
Every now and then the market throws up what I usually boringly call a Debt for Equity shorting opportunity. (My esteemed mentor Evil would, in less temperate terms, no doubt term it as a screaming copper bottomed no-brainer.) It happened with Marconi, Telewest, Jarvis and several other former high flyers and in my opinion is now happening with New Star Asset Management.

To profit on these situations the following ingredients are needed:

1. A willingness to short a share that has fallen at least 90% already.
2. A grasp of O level Maths.
3. A little common sense.

New Star Asset Management is a fallen star:

A. Mainly because it borrowed £300 million that it did not have right at the top of the market (06/07) to pay a special dividend it had not earned of £364mn (yes borrowed money to pay a dividend: these things were normal in June 2007.) When I asked at the time how this could happen I was told that it was for tax reasons It was " a scheme of arrangement to return £364 million to shareholders" Well silly me. If its esteemed bankers lent NSAM £300 million for to pay it straight out in unearned "returns" to shareholders for tax reasons it must be OK. Oh and I forgot to mention that company directors and staff sold £210 million worth of stock in March 07 at 455p per share. Good timing.

B. Because it lost money on the funds it was managing. Even more than its competition.

Here are some factors to consider about NSAMs present share price value (4.15p)

Aberdeen Asset Management recently set a marker for the current value of funds under management by paying 0.625 % for £40 billion of funds of other peoples' money formerly "managed" by Credit Suisse. (That's 0.625 not 6.25: it paid £250mn and in paper not cash)

NSAM had £23 billion and now has £12 billion and falling of funds under management owing to market losses and withdrawals.

To avoid oblivion NSAM has offered 95% of its enlarged equity to its bankers to forgive its net debt of £230 million

NSAM has recently announced that bidders have emerged for the equity of the company, conditional on the announced D4E being effective

The suggested price that bidders may be interested in NSAM is £100 million "conditional on the restructuring taking place." That is £100 million for the whole company of which the current shares make up 5% (This would make sense as being roughly a generous 1% of FUM)

Here is the O Level Maths

When the Restructuring takes place NSAMs current Market cap (at 4.15p) of £11.5 million effectively represents 5% of the company's equity

Therefore the company is now effectively valued at £230mn

Conclusion

It is at least two times overvalued for a tarnished franchise (see Aberdeen deal mentioned earlier) and will be shown to be as soon as the bids emerge. These opportunities don't come around that often and in my view should be grasped. Sell at 4.15p with a sub 2p target (at 2p its a generous £115mn market cap for the company)

Lucian Miers – an infamous short seller – is the Bard of the Boleyn

[knowing] 15/1/2009 10:13

I see that there are shorters sniffing around here.

[ohsod1t] 15/1/2009 10:05

yes please tell. I held to 4.5p which was as good as it gets.

[8trader] 15/1/2009 08:19

Why did you dump NSAM when you posted of a 8-10p target numerous times
treacle ?

[8trader] 15/1/2009 08:14

I see treacle that must have pasted hundreds of 8-10p posts dumped
substantially below that and deserted the thread in no time.

[knowing] 14/1/2009 16:16

Maybe add a few more here. Market could bounce tomorrow.

[doorway] 14/1/2009 12:44

the way i see it they just want your shares...quite a few sells and the price hasnt really gone down that much...this is what has happened over the past few days..it will probaly close up again.

[duncancosgrove] 14/1/2009 10:58

Hope you're right.

[doorway] 14/1/2009 01:26

undervalued......

[knowing] 13/1/2009 23:38

Interesting article

[knowing] 13/1/2009 23:07

Schroders, Neptune, Aberdeen and others all reportedly interested. If they see value with the integration then we should see a bidding war.