Thinksmart Share Discussion Threads

[carcosa] 11/1/2022 16:04

Bank of Spain gives regulatory approval to Block's takeover of Afterpay. So that's the final hurdle overcome leaving only the formality of the 14 January ThinkSmart shareholder approval vote.

[joe say] 11/1/2022 10:54

Thanks Carcosa - helps to get your account of the whys etc

[mjneish] 11/1/2022 09:30

So Kinderhook have dumped just shy of 900,000 shares.

[mjneish] 07/1/2022 18:25

Enlightening! You really have a big advantage if you have access to such detailed information. Cheers.

[carcosa] 07/1/2022 17:07

Probably my final words on this topic of auction trades (and Level 2):

Here are three screenshots during todays closing auction.



Here you can see the seller trying to offload 15,000 shares at 85p. This has been going on for some time so I guess he/she placed the order a long time ago and set a month or so time period.

Also note that someone wants to buy 8000 shares at 49p but as yet there is no seller at that price.


The buyer is still asking to buy 8000 shares at 49p. Since the pre-auction price was 48p quoted by market makers and being filled at 47.7p in actuality then he is likely to get his desired shares as he is asking 'too much'. The buyer may have placed the order earlier in the day when prices were higher not realising things had moved on. Four people see this and offer a total of 18376 shares at or below the buyers price.


The algorithm does its stuff and the buyer ends up with his desired 8000 shares at 49p. What we don't know is whether or not he got all the shares from one, two, three or all four from the sellers. But some sellers may have ended ended up getting a higher price for their shares than otherwise would have been the case during end of day trading. Thus we end up with an Uncrossed Trade of 8000 at 49p; all because of a sole investor probably having a cup of tea and not watching the action :-)

Depending on the software used this might be what is seen as the closing price; 49p, when in fact the 'real' closing mid price was 47.9p. So all things being equal it should open lower by 2.2% tomorrow morning (In reality unlikely because AfterPay and Block will influence the share price overnight).

[mjneish] 07/1/2022 14:19

Carcosa, thank you so much for taking the time to type up such a detailed explanation. It is all much clearer now.

[ffaffaa] 07/1/2022 10:18

CARCOSA


You have opened a new world to us, very grateful indeed.

Do you need Level 2 to see all what you described so well?

thx

[kadvfn1] 07/1/2022 09:55

Thanks carcosa much appreciated. Guess I'll now have to come around to having a strong conviction for block and hope bitcoin can do another leg up towards 100k

[kadvfn1] 07/1/2022 08:05

Just put of curiosity. Will we still be getting block share at a discount at this price?

[ffaffaa] 07/1/2022 07:30

surprised Premium Member
Thu 09:16

Hi Draft , posted some stuff below....and some folk buy when prices are rising, some buy when at lows, we all have different takes, however, the figures suggest a value gap currently.....interesting markets and decisions



9.0 Conclusion
In summary, Square is a behemoth of a business that has only been made stronger with the addition of Afterpay into its ecosystem. With a Seller-focused segment that has yet to experience serious competition, Cash App bolstering strong customer adoption and sticky associated use-cases (P2P money transfer, investing and spending) and Afterpay cementing Square as a bank of the future with its exposure to a fast-moving payment method that is taking the world by storm, it is quite easy to be a Square shareholder.



surprised Premium Member
Thu 09:30

Hi Archy, a bit more insight into Square (a bank to be among other aspect )



''....Cash App Pay will allow consumers to pay with their Cash App accounts at participating Square Sellers. Though reliant on the extent to which consumers are willing to forego their credit cards, debit cards etc. to use the cash app ecosystem instead, this poses a very interesting opportunity for Square. When combined with the Afterpay efforts, this proposition is only further strengthened...
...Square’s undeniable value to sellers, the series of efforts they have embarked on in order to continuously spur growth in both of their main business segments and the attempts they are making to benefit from closed-loop payments. It is an exciting time to be part of everything Square is doing.

Square is at the top of the Fintech industry for a reason. With two strong business segments growing larger by the minute, there is a lot to like. In addition, with the Afterpay acquisition in mind, my opinion and conviction is only strengthened. ''



The 32 analysts offering 12-month price forecasts for Block Inc have a median target of 300.00, with a high estimate of 360.00 and a low estimate of 172.00. The median estimate represents a +108.93% increase from the last price of 143.59.



surprised Premium Member
Thu 10:59

these guys see value ahead..for both TSLas it stands today and the Block investment looking ahead

''..with the investment in future being liquid Block shares rather than the illiquid Clearpay minority holding. Montarello is bullish on Block long-term but we suspect he will be pragmatic in realising value ...''

''Value per share (107m shares in issue) = 72.6p
Current Think Smart price = 54p

...the discount to fair value has widened, with Think Smart now trading at ca 25% discount to its asset value (which we can now measure accurately). This looks attractive - assuming your view on Block is reasonably positive.''



The 32 analysts offering 12-month price forecasts for Block Inc have a median target of 300.00, with a high estimate of 360.00 and a low estimate of 172.00. The median estimate represents a +108.93% increase from the last price of 143.59





Dartron
Thu 12:29

Interesting that today has so much focus on Block and Crypto. TSL do not own any shares in Block yet, or Afterpay, and will be voting on accepting the deal later in the month. Think this could be quite a wild ride IMO, with many twists and turns. Ned has a huge interest in this being a good deal. Is it possible, the deal could get rejected, and a better offer received? There must come a point when this needs to be reconsidered. I recall many posts saying that the longer the deal took to conclude the better it was for TSL. Worth a punt at 49p for something that only 6 months ago was worth near £1.60 per share.

[jon l] 07/1/2022 00:26

Thanks for posting the ST writeup.

I've seen no TSL commentary so far from brokers and other journalists, so that's the only "professional" comment so far. ST plays it straight on the situation now found, and I agree with him. For continuing TSL holders it is now a case of grit your teeth and await (a) market revaluation of Block, and (b) sceptical views of TSL's board to abate, narrowing the risk discount which is suddenly very wide indeed.

But...ST carefully avoids getting into how the board's agreed terms with Afterpay compare with the market's (and his published) expectations. There is good reason why that risk discount, instead of disappearing, has so widened to our disadvantage.

[mjneish] 06/1/2022 18:03

Carcosa, thanks for that detailed explanation. Pardon me if I didn't quite get it, but does what you said amount to this? Say that the bid/ask is 50p/52p. Then trades can take place at prices outside of this at auction? Would this result in the bid/ask price moving towards the price that the bulk of these transactions are taking place?

Well we already seem to know the reason for today's fall, but this is an interesting topic in itself. Cheers.

[ffaffaa] 06/1/2022 17:55

yes

here it is and it is a BUY




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.

[coyy] 06/1/2022 17:46

ST at IC has just published an article on TSL which arrived in my inbox at 17 09 UK time.

[mjneish] 06/1/2022 15:32

Could someone who knows how these share auctions operate kindly explain whether the price movement today is set solely by supply and demand for the day or whether there are other forces at work?

As of a few minutes ago, a total of about 1.5 million shares had been traded today at an average price of say 49p. that's about £750,000's worth. So nearly 20% of the company's market cap. gets wiped off by this meagre amount of trading?

There must be something more in it, and that's why I'm asking. Thanks.

[coyy] 06/1/2022 11:44

I think ST only returned from HOLS yesterday so not expecting any comment until next week.
I suspect it will be top of his list given his frequent bullish commentary over time.

[shaker44] 06/1/2022 11:35

Big fall now. Btc related??
ST back from leave but silent so far