Thinksmart Share Discussion Threads

[toptomcat] 10/11/2021 08:37

Very positive update. This appears a low risk play on future share price growth. The call option seems highly likely to play out and the special div is a nice bonus.

[kadvfn1] 29/9/2021 09:28

Yes if anyone attend please could you summarise for us? Thanks

[daemonfunds] 28/9/2021 21:38

@davidosh: any takeaways from the presentation?

[davidosh] 28/9/2021 13:55

Thinksmart will be reviewed in the Mello September Results Review show tonight



To join with a complimentary shareholder pass use code 2809Mello

[daemonfunds] 21/9/2021 21:15

a couple of exercises of share option awards by thinksmart employees over the last couple of days. what does that suggest? that news of a value for Clearpay by Afterpay/Square is imminent and they want to be able to capitalise? or something else?

[bwm2] 15/9/2021 09:10

This is based on results to 30/6/21. We will have another 9 months growth under the belt to the earliest practical time for the option to be exercised and the customer dynamics are in the UK's favour. This is one of my three "Hat Bets" (as in the film revolver)
DYOR

[kadvfn1] 15/9/2021 08:56

ST working his magic - target north of 160p

[shaker44] 14/9/2021 08:26

So valuation of clearpay up from £53m to £125m in 12 months to June 2021. Presumably still increasing at about £6m a month. Even with today's rise, shares look undervalued to me.

[jon l] 25/8/2021 12:36

The APT balance sheet carrying value of the Clearpay liability as at 30 June was increased by A$96.8m in today's accounts, a large non-cash item leading to APT's increased loss. The growing liability is, of course, a result of using Buy-Now-Pay-Later to acquire 90% of Clearpay, leaving the remaining 10% to grow in TSL's hands. This growing liability will worry minds in APT and Square, as it must be satisfied in real cash if APT is no longer listed.

Riddles1 is right that, even with the increase, the carrying value on APT's 30 June books is still substantially (~25%) below a mark-to-market valuation of the liabiity to TSL. I calculate that as 6.5% of Clearpay, which on 30 June was 13% of Afterpay based on active customer numbers. That is one gap which will close as we approach the transaction after Christmas.

The other anomaly to close is TSL's share price, continuing to trade at ~30% discount to the underlying value of its Clearpay interest.

At the next APT results for 30 December this will change again. Clearpay will likely be more than 13% of APT by then. And APT's value will move depending on Square's share price (which has risen since the bid announcement). Exchange rates are the other main variables.

[carcosa] 25/8/2021 09:47

Because, as has been mentioned many times before, that is the cost of the option.

[riddles1] 25/8/2021 09:29

Does anyone know why the provision in APT accounts is only A$99m or GBP52m as at June 21 and why this does not tally with everyone expectations.

[bwm2] 25/8/2021 07:47

Pages 113 & 114 of the report and accounts sets out the basis of valuation. As at the half year stage this is now highlighted front and centre as causing a loss after tax. Regrettably, the change of control allows APT to bring forward its option which I'm sure they will wish to do to eradicate the cause of this non cash loss. However, the stellar UK performance and perhaps a wish to retain key personal strengthens TSL's hand.
IMHO

[jon l] 25/8/2021 05:41

From commentary on Afterpay's FY21 results announced today in Oz:

"The company made a loss of $159.4 million, an increase on last year’s loss of $22.9 million. Afterpay said the main reason for the bigger loss was because its UK business had increased in value, which meant Afterpay had a larger liability to a business partner who owns an option over a part of the UK business."

Clearpay up 242% on FY 2020 on a local currency basis... "Increase in the valuation of Afterpay's UK operation (Clearpay) due to better than expected results for the period ended 30 June 2021, improvements to Clearpay's forecast future cash flows, and increases in broader market valuations for similar businesses."

[paulbutcher1999] 06/8/2021 09:42

This is the beauty of small caps. Even when anyone paying any attention knows there is 40% plus upside coming withim months the market just leaves it on the table in slow motion for everyone to be able to catch up in their own sweet time. Still below 100p 😂🤦‍♀️

[jon l] 06/8/2021 03:14

Yes, lots of moving parts in the pricing. TSL "should" be worth approx. 6.5% of Afterpay's UK operation - but based on an Australian share, which Square has now priced in US$. Two exchange rates over time: US$/A$ and A$/£; SQ share price over time; Clearpay already more than 10% of Afterpay and rising over time.

As riddles1 suggests (post 442), there may be an intention to close this minority stake before the takeover completes...but why would TSL agree, given that the moving parts are rising in our favour over time and a transaction after Christmas may well be a bigger number?

Lots of tense discussion in smoke-filled rooms.

[shaker44] 06/8/2021 00:29

Surprised to see any sellers just now?

[bwm2] 05/8/2021 18:38

SQ +7.2% today so now +15.26% above the %247.26 deal price. APT and TSL should be strong tomorrow IMHO

[eezymunny] 05/8/2021 12:14

Thanks Jon L. There's some sense to that, but it's not set in stone AFAICS. The Clearpay valuation is not contractually linked to the Afterpay share price - unless I've missed something.

By your sums Afterpay at $29b valuation. Clearpay UK c. 13% of Afterpay revenues. TSL own 10% of Clearpay UK.

If pro rata to revenue that would value TSL's spoils at c. £270m. 35% of that goes to TSL management etc leaving £180m for TSL shareholders. That's c. 178p per TSL share.

Clearly I'm missing something.

I suspect there's an algorithm not in the public domain.

[jon l] 05/8/2021 11:36

You can work it out from Square's explicit valuation of Afterpay. Clearpay is now worth 10% (or a bit more) of Afterpay, which Square has now priced at US$29bn. TSL has 10% of Clearpay, leading to 132p per TSL share when fully diluted.

Clearpay's December 31 valuation implied 100p per Thinksmart share, while the shares traded at 73p. Today's TSL is trading at a similar ~30% discount to underlying value. Thanks to Square the anomaly will be resolved over the next six months. The longer they leave it, the more Clearpay's meteoric rise will grow its share of Afterpay's value.

[eezymunny] 05/8/2021 10:48

The H1 report says "Consideration for the remaining Clearpay shares held by ThinkSmart at the time of exercise of the put or call option will be determined by agreement, or failing agreement, by an independent expert valuation of Clearpay shares"

That doesn't give anybody any idea what the number may be. Am I missing something?

[carcosa] 05/8/2021 09:06

See p44 of Afterpay H1 report which explains how the options are valued in their accounts.

[otemple3] 05/8/2021 08:59

See p44 of Afterpay H1 report which explains how it is valued in their accounts

[eezymunny] 05/8/2021 08:46

Simon T has only the info that anybody else has....

Is he just guessing at valuation? Or are his numbers based on some valuation formula in the public domain?

[bwm2] 04/8/2021 11:01

I think early q2 to be realistic

[euclid5] 04/8/2021 10:00

Hopefully once we get this pay out, TSL may do a special dividend to s/holders, sometime in the 1Q22