Software Circle Share Discussion Threads

[empirestate] 27/7/2010 21:59

looks like a good move watchout, the earlier trading pattern suggested an overhang here which could be clear now, certainly should show a decent recovery if those 100k buys keep on coming in

[watchout2] 27/7/2010 11:36

I've bought into these today, short of stock online and a 2 mil
cross trade, seem to have cash at or around market cap, hoping
that was a one off all sorted now but there seems to be value
at this level and somebody has seen it.

4.25-5p, can sell 100k at 4.5p but only buy 10k at 5p full offer online
so it could bounce back.

[the_doctor] 26/7/2010 09:58

But IF the loss was only $3.8m, and the company was still making say $2m as last year
then why would the cash level not be around $13m
Instead of the supposed 'materially below' $15m
It doesnt make sense to me

That would suggest to me that rather than making any cash this period, the company has dropped to being flat/ making a loss.

That would of course perhaps explain why they were taking excessive gambles!?
In keeping with that, note that there has been no statement to say trading good/in line with expectations etc. Why not?

I'm staying clear, but watch with interest.

[muxdapanza] 26/7/2010 08:26

maybe he averaged down and went beyond the company stop loss, as per the update, and not unlike myself, as I have more than averaged down at these levels.

[the_doctor] 26/7/2010 08:25

Someone clearly took the speculation too far. Why? and who knew.
Maybe only the CIO knew and he was trying to save his skin?

As I've put on here before, if the loss was only 3.8m, why would cash be 'materially' below the previous 14m when the business was making cash??

[muxdapanza] 26/7/2010 08:22

also ..

Previously they had made a modest profit on fx trading.
Their income will be in the yuan, but they report in us $ and are a UK company, so some degree of fx trading is required.

[boadicea] 26/7/2010 08:17

doc - Why would the company have had fx stop-loss criteria specified unless they were engaging in operations that required them? So yes, by implication at least, the board must have known and approved. It was the manner of the execution that went wrong from their pov, not the fact of the forex trading itself.

[the_doctor] 25/7/2010 20:18

It looks good value if there arent more worms in the can.

Did the board know this was going on?
Why would the CIO take such gambles - what did he stand to gain?

My concern would be that they speculated on Forex to bring in income and fiddle the books to make up for some disappointment elsewhere. Maybe that's paranoia?

[empirestate] 25/7/2010 17:34

evidently an overhang here holding this one back but on balance sheet this is looking good value now. thought these rogue traders were in the banks only but if someone in a bank can do it surely it is easier in a company. if it would have beeen a usd3 million profit they would probably have made him chairman.
best wait until the tell tell signs of the seller being finished

[buggy] 21/7/2010 14:43

Boadicea,

Thanks, phoned them this morning, just before my post, and they said that they will investigate.
Have now been paid into my account and already moved into other shares.

[boadicea] 21/7/2010 13:53

buggy - Barclays credited it yesterday and SelfTrade have done so today.

[muxdapanza] 21/7/2010 09:45

mine are in a crest account - cheque arrived Monday

[buggy] 21/7/2010 09:35

Anybody using norminee acount got the divi yet? I use SELFTRADE and nothing yet.

[zangdook] 20/7/2010 09:59

orinocor
I received some cash from them yesterday.

[orinocor] 20/7/2010 09:25

I doubt there will be a cash return.
There are laws against chinese companies returning cash to foreign investors.

[stewolf] 19/7/2010 19:39

Been away on a short break so just read the update. I now see a Company that has been actively involved in a seperate 'business activity' of currency speculation as well as that of software design. This 'other' part of the business, it seems, has involved setting up, assignment of personnel including a head guy (Mr Biao) and funding (from money the Company generates from software). . . all done with the least hint possible (if any) to outside investors that this was taking place, judging by the reactions on here and elsewhere.

If it had been a one-off 'rogue' type of affair, someone using the Company money innappropriately, a decision to hold through would have been a reasonable one to make, given the success of the software business. Still hope they sort it out, but my concerns a more acute now.

[zangdook] 19/7/2010 13:07

Just had my dividend.

[explorer88] 19/7/2010 12:45

I'm very disappointed by Sinosoft's gambling on forex.

I have today sold the last of my holding in SFT and will keep an eye on what is their eventual exposure to this disastrous activity.

I suspect there is more bad news to come / losses to be announced as all the other financial positions have now been closed.

[the_doctor] 19/7/2010 06:23

Defined enough. It suggests more than $2-3m below, which is what a $3.8m loss would suggest.

That being the case, IMO I think it's therefore likely that 'normal' business activities have also gone poorly

If cash was now $11-12m, they'd not say 'materially'

[stewjames] 19/7/2010 03:39

Is "materially below" that well defined?

[the_doctor] 18/7/2010 21:08

'hedging (I called it forward cover) is the opposite of speculation as I tried to explain' agreed


'the mere existence of stop-loss limits proves the intention to speculate without justifiable reason'

yep, which raises my concern that the board knew about it?


'any previous currency trading has been taken as a capital or financing effect (i.e. not revenue'
That should be the case, yes


However, any explanation why a £3.8m net loss on Forex speculation should cause their cash pile to be 'materially below' the end 2009 level when the business should have been cash generative otherwise?

[the_doctor] 18/7/2010 18:42

'Buggy, you are quite right that the company had absolutely no business to be speculating in FOREX'

should a company with ex-domestic operations (which I'm assuming this co. is) not have some FOREX hedging at least?

Interesting story...

- how much of the past performance was down to speculation?

- how much cash are they left with

- it would appear that the co. is still cash generative, but if it has been up to these tricks, who knows. It isnt 100% certain that they didnt know what the CIO was up to. I've not looked - do the other board members have decent credentials?

If the loss from FOREX speculation was around $4m
and the co was previously generating cash
Why would the resulting level of cash be 'materially' lower than $14m
Should it not be around $12m??

The concern would be that things are a little worse than they've let on?

Around 3.3p looks like a TA punt level?

From a very brief look, the underlying story looks positive
so, if there's nothing else lurking in the woodshed, this could be good for a move up?...

[garth] 17/7/2010 07:48

I've now moved under water in these - but its nice to see some familiar old friends commenting over the last few days.... Helps to increase confidence that the underlying story should yet come good...

[sir brainy] 16/7/2010 18:53

Graph looks pretty hot