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Share Name Share Symbol Market Type Share ISIN Share Description
Thinksmart Limited LSE:TSL London Ordinary Share AU000XINEAE8 ORD NPV (DI)
  Price Change % Change Share Price Shares Traded Last Trade
  0.00 0.0% 28.50 0.00 00:00:00
Bid Price Offer Price High Price Low Price Open Price
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Mobile Telecommunications 4.29 71.68 67.28 0.4 30
Last Trade Time Trade Type Trade Size Trade Price Currency
- O 0 28.50 GBX

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Posted at 06/2/2023 08:20 by Thinksmart Daily Update
Thinksmart Limited is listed in the Mobile Telecommunications sector of the London Stock Exchange with ticker TSL. The last closing price for Thinksmart was 28.50p.
Thinksmart Limited has a 4 week average price of 0p and a 12 week average price of 27.50p.
The 1 year high share price is 43.50p while the 1 year low share price is currently 19.25p.
There are currently 106,567,814 shares in issue and the average daily traded volume is 0 shares. The market capitalisation of Thinksmart Limited is £30,371,826.99.
Posted at 19/3/2022 07:56 by g1g4lo
618,750 shares in Block Inc are worth $86.625,000 @ $140 and with an exchange rate of 1.32 $/£ is £65,625,000.

With Thinksmart share price @ 35.5p gives an MCap at just £38m against just the value of Block at a discount of 42.1%. So just waiting for the rerate here and expect a discount of around 20% to the Block price which would leave TSL share price currently at 49p, an increase to the current share price of 38% but expect Block to continue to rise so see at least a doubling of TSL share price from here.

Posted at 06/1/2022 17:55 by ffaffaa
yes

here it is and it is a BUY

htTps://www.investorschronicle.co.uk/ideas/2022/01/06/unravelling-thinksmart-s-share-price-decline/


Unravelling ThinkSmart’s share price decline
Shareholders in an Aim-traded finance company have been hit by a sell-off in Twitter founder Jack Dorsey’s New York Stock Exchange-listed fintech fund, but is it worth holding on?
January 6, 2022
By Simon Thompson


A sharp fall in the stock price of New York Stock Exchange-listed Block (SQ:NSQ), a US$66bn market capitalisation fintech fund led by Twitter founder Jack Dorsey, has led to a similar sell-off in Aim-traded finance company ThinkSmart (TSL: 47p).

Block is in the process of acquiring Australian Stock Exchange-listed technology group Afterpay (AFT:ASX) in an all-share takeover (currently worth US$15.5bn) which is expected to complete in the current quarter. Afterpay shareholders have already sanctioned the deal.

This is relevant to ThinkSmart shareholders as the UK company agreed terms in late December to sell its 10 per cent holding in Clearpay, a UK payment platform that enables consumers to split the cost of retail purchases into interest-free payments, to Afterpay in exchange for 1.65m shares in the Australian listed-group. This holding will in turn be exchanged for 618,750 Block shares assuming Block’s acquisition of Afterpay completes.

But with Block’s stock price almost halving in value to US$143 since late October, then ThinkSmart’s proposed holding of Block shares is now only worth US$88.5m (£65.5m), or 61.5p per ThinkSmart share. The UK company had valued its stake in Clearpay at £125m in its interim accounts on 30 June 2021, so this represents a material decline. In the intervening period, shares in Afterpay have fallen almost 40 per cent, too. ThinkSmart owns other assets and cash worth £6.5m, so the company has a proforma sum-of-the-parts valuation of £72m (67.5p).

The proposed disposal of ThinkSmart’s shareholding in Clearpay to Afterpay will be put to a vote of ThinkSmart shareholders at a meeting on Friday, 14 January 2022 and is unanimously supported by the directors who hold 41 per cent of the shares. It seems highly likely to be approved by shareholders. But if ThinkSmart does not obtain approval for the disposal before 17 January 2022 then the existing put/call arrangement (exercisable in 2023-24) between Afterpay and ThinkSmart over the UK company’s 10 per cent minority stake in Clearpay will remain in force.

Bearing this in mind chairman Ned Montarello points out “that of the 280 analysts covering Square/Block all of them have a target price of between US$200 to US$250. That is the look through that we as a board have taken. It is about the volume of shares [ThinkSmart shareholders are receiving] at this point not the value of them. We are excited by the prospect of the Block holding as they emerge as one of the winners in this Payment gateway space with the Afterpay Buy Now Pay Later product and their Cash App as core to their growth strategy.”

Montarello adds that “Thinksmart shareholders are now more diversified with their Block holding both in product and in geography.” The directors will look to return value to shareholders once a form of return of value has been determined in due course, but given the current gap between Block’s current stock price (US$143) and the fair valuations of analysts (US$200 to US$250) then this is hardly the time for the company to exit Block.

Moreover, with ThinkSmart shares trading 30 per cent below spot sum-of-the-parts valuations, then the risk premium embedded in the UK company’s share price is at elevated levels. When the technology sector sell-off in US markets abates – it has been prompted by minutes from the Fed’s latest meeting that revealed the US central bank believes it’s time to accelerate the withdrawal of quantitative easing – then expect Block’s stock price to recover and ThinkSmart's share price discount to sum-of-the-part valuations to narrow. Furthermore, the 'margin of safety' embedded in ThinkSmart's current valuation makes this a buying opportunity.

Posted at 23/12/2021 01:55 by jon l
Hi Portugull and Jacqedia.

We do not become owners of Afterpay/Block shares, the Thinksmart company does. We are merely private shareholders in that company.

Thinksmart is a not a UK company but is headquartered in Perth, Aus. Thinksmart shares trading on the LSE are Depository Interests (DI). Dividends etc. are quoted in Aus$ and paid to us in UK£ at prevailing exchange rates.

The end result of this deal, if/when it goes ahead, will be that we remain shareholders in TSL, whose board controls ownership of 618,750 SQ shares after late January. The TSL share price is worth less than the asset value of that shareholding because, as we have seen, the Thinksmart board is quite capable of doing things with its control that you and I would not do (unless, ahem, we were offered a private inducement that is not publicly declared...).

For UK residents interested in fintech and specifically in the Block-Afterpay offering, it would be better for us if we could hold SQ shares (or DIs) directly in our own control, to buy and sell as we like on the LSE. But that is not available, with SQ traded only in New York (and after January also as DIs on the Australian exchange). So holding LSE-traded TSL as a proxy is all we have in London - with the attendant risks of illiquid shares, the TSL board making its own decisions, and light regulation on AIM.

Stockopedia shows the number of TSL shares in issue as 106,587,814; ADVFN shows "106.57m" which isn't quite the same. I haven't checked the truth but will use Stocko.

1. TSL shares in issue 106,587,814
2. APT shares to be acquired by TSL by sale of the Clearpay interest: 1,650,000
3. APT shares per TSL share (2)÷(1) = 0.01548
4. Block(SQ) shares per TSL share (3)x.375 = 0.0058
5. 40,000 TSL represents 619.2 APT which will become 232.2 SQ in late January.
6. TSL's NAV also includes the small legacy business being run out.

Hope this helps. This is my understanding and open to correction by anyone!

Posted at 22/12/2021 11:26 by jon l
TSL has generally traded below NAV as an illiquid AIM minnow. If it continues to do so then from today they will presumably track SQ at the 20% discount to NAV now seen.

I addition there is short-change in the asset deal the board has agreed. Just why TSL board and its advisors have agreed this is not explained and perhaps will not be. Clearpay was ~13% of Afterpay's market cap when last disclosed on 30 June, and growing fast. Even with the recent decline in APT's market cap, TSL's interest in 6.5% of that 13% represented ~£92.5m on 17 December when they agreed the sale (giving NAV about 95p/share), much higher than the £73.4m taken.

That's why the TSL share price was holding above 95p until knowledge of the sale agreement started to get out.

Posted at 21/12/2021 10:39 by carcosa
kadvfn1,

Yesterday's RNS implied that shareholders would get the value announced less 35% due to the ESOP. Todays's RNS says that shareholders will get the full amount.

Currently that is:
1,650,000 - AfterPay Shares
AUD 83.0 - AfterPay Share Price
1.86 - Exchange Rate
£73,704,944 - Total Value
106,600,000 - ThinkSmart Shares in Issue
£0.69 - p/Share
£0.04 - TSL Legacy business
£0.73 - NAV

You can do the same calculation using Square/Block conversion and arrive at much the same valuation. Basically TSL is trading 20% below NAV.

The 'problem' now is that TSL shareholders are selling no matter what and the TSL value is tied to Square's share price which many people think will continue to decline due to covid/lockdowns/regulation/earnings miss and whatever else. A further 20% fall in Square's share price is not out of the question according to some commentators. There will also be an element of discount given the TSL/AfterPay/Square deal has yet to complete.

Posted at 15/12/2021 04:43 by carcosa
blueclyde,

Depends on your definition of intrinsic... I'd hazzard a guess its in the 20-30p range.

It's valuation however is somewhat different. The terms of the put/call option have never been provided. Thinksmart have on prior occasions provided estimates of what they think it is worth based on three independent valuers and taking, not the average but 67% of the spread. But again we don't know what the spread was.

AfterPay have provided in their past accounts the liability for the option and applying the Black-Scholes model to that has given about 75%-85% of what ThinkSmart have publicly valued their holding in ClearPay to be.

If you accept ThinkSmarts valuation then adjust for exchange rate differences and AfterPay's share price change over the intervening period then you can come up with 141p with no discount. If you accept the 17% liquidity discount is no longer valid and accept the 35% discount for the employee scheme then that leaves 92p/Share.

However all of that is based on data that is 6 months old which in this business is a long time. ThinkSmart have already stated that in their negotiations they consider Active Customers to be the key metric. It's not as simple as saying ClearPay is worth 10% of AfterPay due to the shareholding percentage because ClearPay UK is providing the bulk of the EBITDA, more than their fair share of customers and revenue. These items are thought to be growing even larger over the last 6 months.

If as a crude measurement you were to simplify the valuation as a proportion to the AfterPay market cap then an additional 1% Change in ClearPay's value to AfterPay Leads to an 11% Change in ClearPay's valuation.

Things we do not know:
1. We do not know how much wiggle room there is within the Option mechanism (negotiation, input values, time). Note that the option is described as key 'valuation principles'. That could cause quite a lot of friction I'd imagine.
2. The effect of a cash call on AfterPay for the loan note repayments if the Bank Of Spain drags its heels and its knock on effect with ThinkSmart
3. What the state of business is with AfterPay and/or ClearPay
4. Whilst it would be highly advantageous for AfterPay to buy the remaining shareholding of ClearPay with shares, the share price decline for Square and AfterPay may shift them to a cash purchase post merger.
5. The 35% discount for the employee share ownership plan is a maximum number; we do not know if this would be the final discount level.
6. Given share price declines of all parties involved they may decide not to exercise the option at all giving ThinkSmart until February 2024 whereupon the ClearPay holding valuation could be significantly higher still.

Having said all of that, as of today I would be disappointed if we did not get north of 120p/share (plus TSL NAV for legacy business).

Posted at 07/12/2021 08:54 by portugull
Big fall in TSL share price this morning down 13%
Posted at 06/12/2021 10:09 by carcosa
If call option is exercised before 18 January 2022 and settled by Afterpay in shares, then at a £233m valuation this would only result in 3.76m Afterpay shares being issued, a very insignificant sum.

Afterpay shares would then be converted into Square shares at the rate of 0.375 per one Afterpay share when the Square takeover completes.

Post completion, Square would have 571m shares in issue, so ThinkSmart's own holding would be 916,500 Square shares; i.e 0.16% of the total.

Hence any suspicion of walking down the price would not make any sense if paid in cash or shares because it is such a relative tiny amount; a thorn in the backside so to speak.

Conversion would me a very simple matter for a court to do. Would take maybe a minute.

Given the £233m valuation was estimated a long time ago (7 months old by time of completion) and the fact that ThinkSmart Directors believe that greater weighting should be assigned to active customers there is good reason to believe the valuation can be well north of £233m.

Short term share price fluctuations should have no bearing on the valuation; concern that the deal may not actually happen is the primary focus for TSL and AfterPay shareholders. Given that Square have already signed off on it and AfterPay are pushing hard for it to complete then there I believe it is reasonable assumption the deal will go ahead.

Thinking more about the 14 December meeting and actually reading the ASX RNS it seems as though this meeting will go ahead because Afterpay intends to approach the New South Wales Supreme Court (Court) for orders in connection with the conversion of the Bank of Spain condition precedent to a condition subsequent. Or in other words, as I read it, Shareholders will vote on the deal but will only be implemented when the Bank of Spain approval is obtained.

The Bank of Spain approval is necessary because that is AfterPays gateway for operation in all of the EU; not just Spain. Given that, it does not fill me with a confidence they will act quickly...

The negotiations have already been underway for some time between TSL and AfterPay, as was reported. TSL has the upper hand because it is Afterpay that is under time pressure to complete the deal. Long term TSL holders may be happy to have shares in a US listed growing disrupter company anyway.

If ClearPay has a great Christmas and New Year then that would further increase the value of TSL;s stake; so a delay is not necessarily a bad thing for TSL holders unless AfterPay has a blow-out year end; Interesting to note Afterpay did not issue their last quarterly operating update...

Posted at 28/10/2020 03:29 by carcosa
Whilst there is now an argument that the TSL share price is up with current events it is the future of AfterPay's business that remains the driving force.

At time of writing APT share price is up 6%, falling back from 8% earlier in the day following the Q1 Trading Update announcement

hTtps://www.afterpay.com/attachment/327/show

Headline news is essentially underlying sales in Q1 more than doubled, helped by strong growth in the United States where they added nearly 1 million new customers over three month, with underlying sales there more than tripling to A$1.6 billion ($1.14 billion) from a year earlier.

Afterpay now has 11.2 million active customers as of the end of September, 1.3 million more than three months ago.

Afterpay is richly valued but given TSL shareholders end game date is 2023 the business appears to be on course and it's up to APT investors to value the company accordingly; given customer growth rate I suspect further share price growth is attainable.

Turning to ClearPay:
Underlying sales in the UK in Q1 FY21 grew by 346% when compared to Q1 FY20.
On a local currency basis underlying sales grew by over 40% compared to Q4 FY20.
Active customers increased by 282% with the growth in average frequency per
customer outperforming both ANZ and the US

So there is some justification to expect significant organic growth in ClearPay too, something that perhaps some investors will overlook.

Adding in the Tencent share holding and the financial sense for APT to takeover TSL before 2023 long term holders of TSL should feel comfortable. Short term holders may, however, wish to solidify their recent gains. So something for everyone?

Posted at 20/10/2020 04:39 by carcosa
AfterPay Share price currently up ~6% at time of writing as a result of this:

hTtps://www.afterpay.com/attachment/320/show

Which basically says that they are now in the online banking business now that they have a ‘collaboration agreement’ with Westpac Banking Corporation, under which Afterpay said it would soon be able to offer savings accounts and cash flow management tools to its 3.3 million strong Australian user-base.

This, following on from the recent finalisation of AUSTRAC external audit which essentially gave them the stamp of approval in complying with anti-money laundering and Counter-Terrorism Financing explains why the share price has increased significantly over recent days. Now at A$103.

kadvfn1: I think ST just made a small oversight wrt cash payment.

FarnesBarnes: The valuation ST uses is the same as the company calculates, comprising a discount of 20% for the lack of marketability of Clearpay as a privately owned company. Reducing the discount to 10% would increase the fair value by ~£7m. The argument for reducing that 20% discount centres on the mix of revenue and users. Experience shows that as time progresses users increase their sale value as they become more comfortable using the service. Last reported UK market represented 5.4% of underlying sales but 10% of active customers for Afterpay. As the relationship between maturity of customer base and underlying sales changes the discount should tend to unwind. As the Group has limited control over the setting of the price that it will receive for the transfer of the ESOP shares to the Clearpay employees, the Group has further discounted the valuation by 35% Bottom line is that TSL share price is dictated by Afterpay share price, which is very rich price at the moment, but the discounts currently applied to the TSL valuation of their shareholding in Clearpay provide a large element of comfort. However it is not until 2023 will we all know what the actual price will be. Given the fact that AfterPay can buy out the holding for chump change and the fact that the longer they wait the more it is going to cost them, assuming ClearPay continues to deliver the high growth rates, then there will be compelling logic for Afterpay to buy out ThinkSmart’s 10% equity stake far earlier than August 2023.

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