Tmt Investments Share Discussion Threads

[rimau1] 07/2/2024 08:49

Backblaze closed up another 10% overnight. Worth $33m which i classify as liquid assets since TMT can sell if they need more than the $6m of cash that they have on their balance sheet.

[rimau1] 30/1/2024 14:04

Backblaze at new 12 month highs $8.66, provides liquidity if required of $30m+ to TMT, which has a market cap of $100m.

[rimau1] 11/1/2024 16:44

O/T but since i am the only one here......Puretech has pulled back Skyship, decent entry point IMO

[rimau1] 11/1/2024 16:42

Nice recovery here, now deep value territory rather than deep deep value...

[skyship] 20/12/2023 14:33

Ah, yes, of course - thnx...

[rimau1] 20/12/2023 14:24

Bolt is private! Hence using Uber as a proxy valuation mechanism. IPO in 2025

[skyship] 20/12/2023 13:49

BLZE closed @ $8.26. Does Bolt have a listing? Can't find it...

[rimau1] 18/12/2023 15:57

Backblaze shoots through $8, i should have bought some!! Oh wait, i own a shed load via TMT. Phew.

[rimau1] 14/12/2023 06:37

There is no perfect right answer on valuing private companies hence the TMT valuation anomaly. BUT you should highlight that you are comparing 2023 UBER actuals with Bolts 2022 FY! Uber is a mature business and Bolt is in start-up mode hence you pay a higher price for higher growth prospects. No doubt 2023/24 will be a sweet spot so IPO timing is looking good for 2025.

[popit] 13/12/2023 22:16

Also need to look at the Bolt valuation

Revenue for Uber is $35 billion and Bolt about $1 billion

So Uber trades at about 3x Revenue and Bolt about 8x Revenue

Uber is also profitable

So there may be a risk of Bolt being overvalued

But even if the Bolt stake is worth only half the current $100 million the TMT market cap is still covered by Bolt at $50 million and Backblaze at $30 million

[rimau1] 13/12/2023 21:00

Backblaze and Uber at new 12 month highs

[rimau1] 13/12/2023 09:13

On reflection given backblaze IPO'd at $16 a share the optics would look quite bad selling the holding down. I suspect TMT will go quietly about their business and we need to do what i am very bad at and be very patient. When Bolt IPO's in 2025 todays share price basically doubles just to revert to a normalised discount to book value. I guess Simon thompson will have this as a bargain share in feb'24 which could be the next catalyst

[skyship] 12/12/2023 08:50

I suspect they could place the Backblaze holding; but they wouldn't be able to buy in 12m TMT shares at $2.50. Very limited liquidity here, so they would have to start at $3.00 and see how it goes...

[rimau1] 12/12/2023 07:23

Logic is sound Popit but realistically we know that you can't dump 10% of a quoted companies shares without a significant price correction but we could certainly begin to sell down and launch a buyback. I am surprised no activist shareholders have appeared.

[skyship] 11/12/2023 20:39

Many stupidly cheap secondary stocks. TMT a stand-out; as also TRIN. Hold both and losing massively in both; happily better news elsewhere so still up YTD; but not by much!

[popit] 11/12/2023 14:04

They should sell the Backblaze holding for $30 million

They should then use this $30 million to buy back 12 million of their own shares at $2.50

This will then leave 20 million TMT shares and a NAV of $200 million

TMT shares will then have a NAV of $10 per share

If the shares remain at $2.50 they will then be at a discount of 75% to NAV

[rimau1] 11/12/2023 08:36

They only have $6m cash which i suspect is being carefully managed to allow selected follow up investments. No room for a buyback. Could sell down part of the backblaze holding to fund a buyback, they just need to do the maths on accretive sharebuybacks vs selling backblaze at $7.50. Most likely they will do nothing and wait for confirmation of the Bolt IPO timing which would be the trigger event.

[popit] 10/12/2023 12:27

It may look a bit odd for Bolt to try to take over a Venture Capital company that had been one of their early investors

More likely and more sensible for TMT to start buying back their shares and this will increase the NAV per share and the discount

At present the discount to NAV is 65% so perhaps the market will take some notice when the discount reaches 80%

[rimau1] 09/12/2023 06:45

Indeed....If i was the CEO of bolt i would buyout TMT its a no brainer.

[popit] 09/12/2023 05:04

Market cap is only $80 million

NAV is about $230 million

Bolt is about $100 million
Backblaze is about $30 million
Remaining holdings and cash is about $100 million

So the largest holding Bolt is more than the market cap

[rimau1] 29/11/2023 21:43

Bolt $98m, backblaze $28m and cash $6m = $134m. Current market cap $101m. i keep adding, when the penny drops this will rerate sharply just like Augm did today and Merc earlier in the week.

[rimau1] 15/11/2023 11:38

TMT could be the cheapest fund in the market on a risk/reward basis. Uber is 80% up ytd. Even applying a conservative 50% of this growth to Bolt our 1.26% stake would now be worth $98m. Backblaze at $6 a share is worth $24m and we have a net cash position of say $6m. $128m versus a marketcap of $78m and valuing all other investments at zero.

[sev22] 07/11/2023 10:43

Exploit this glaring market anomaly.

A cash-rich venture capital company is rated on a 64 per cent discount to book value despite an impressive track record.

November 7, 2023
by Simon Thompson

*64 per cent discount to last reported NAV.

*Positive portfolio revaluations likely at year-end.

*Net cash position.

*Stake in Bolt worth more than TMT’s market value.

TMT Investments (TMT:228¢), a venture capital company with a portfolio of more than 55 high-growth, internet-based companies, has been severely de-rated since the interim results in mid-August 2023. It’s completely unwarranted.

To put the magnitude of the undervaluation into perspective, the $71.3mn (227¢) carrying value of the company’s largest holding, a 1.26 per cent stake in international taxi and food delivery group Bolt, is the same as TMT’s own market capitalisation. Effectively, cash and all the company's other investments are in the price for free.

It’s not as though the holding in Bolt is being overvalued. If anything, the opposite is the case. That’s because the $103.3mn read-through valuation following Bolt’s €628mn fundraising round in January 2022 was reduced by a third to $69.7mn in TMT’s 2022 annual accounts. The write-down reflected lower comparable valuations of listed rivals after last year’s technology sector rout, and placed a valuation of $5.5bn on Bolt’s equity.

However, the stock price of its closest rival, Uber Technologies (US:UBER), a $98mn market capitalisation company, has doubled in value this year and is trading 14 per cent higher than in January 2022 when Bolt carried out its own fundraising. Bolt continues to record double-digit annualised revenue growth, so has hardly gone ex-growth. In fact, it is targeting a move into profitability in 2024 and a potential IPO in 2025.

In addition, when TMT reported a modest $2mn fall in net asset value (NAV) to $199mn (632¢) in the first six months of 2023, the carrying valuation of the Bolt stake was conservatively raised by $1.5mn to $71.3mn. The stock price of Uber has rallied 10 per cent since then, adding further weight to the view that TMT’s holding in Bolt is conservatively valued.

Huge ‘margin of safety’

It’s worth pointing out that TMT’s 10.39 per cent stake in Nasdaq-quoted cloud storage group Backblaze (US:BLZE) has increased 33 per cent in value from $16.2mn (51¢) to $21.6mn (69¢) since TMT’s half-year end. The holding backs up 30 per cent of TMT’s market capitalisation. Also, TMT had cash of $8mn on 14 August 2023 and no debt. The company should still retain cash of at least $6mn (19¢) after factoring in $0.9mn of new investments made since then, as well as $0.7mn of second-half administration costs.

Or put it another way, the conservatively valued holding in Bolt, listed holding in Backblaze and pro-forma cash are not only cumulatively worth $99mn (315¢), or 38 per cent more than TMT’s market capitalisation, but other investments in more than 50 technology companies are being ascribed no value at all. They have a combined valuation of $106mn (337¢).

TMT’s undervaluation is even more absurd when you consider that since IPO in December 2010, the investment manager has invested in 95 companies, realised 19 profitable full and partial exits and delivered an internal rate of return (IRR) of 16.3 per cent. TMT was one of the earliest investors in some of its most successful technology portfolio companies, including four unicorns: Wrike (exited in 2018), Pipedrive (exited 2020), Bolt and Pandadoc, a proposal automation and contract management software provider. TMT’s 1.1 per cent stake in Pandadoc is valued at $10.8mn, a 32-fold return on its investment, and the Bolt investment has increased 222 times in value since TMT invested $0.32mn in 2014.

On any basis, the Aim-traded shares are materially undervalued and due a re-rating. So, having suggested buying them, at 285¢, in my 2023 Bargain Shares Portfolio, I have no hesitation reiterating that advice despite the fact the holding is underwater. The ‘margin of safety’ on offer is huge. BUY.

[sev22] 22/8/2023 17:43

Despite write-downs, TMT is a bargain way to own start-ups.

The venture capital group is priced on less than half NAV and delivered a resilient first-half performance.

August 16, 2023
By Simon Thompson

*NAV edges down 1 per cent to $199mn (632¢)
*$6.3mn positive revaluations of four smaller investee companies offsets $5.26mn write-downs on four unlisted holdings
*1.3 per cent stake in Bolt rises $1.5mn to $71.2mn

Investors' increased focus on start-ups' profitability has created a ‘survival of the fittest’ environment in the venture capital market. On the one hand, companies with superior products and business models that continue to grow and improve profitability are attracting new capital at higher valuations. On the other hand, companies with weaker business models or non-mission-critical products that were more dependent on future funding have come under increased pressure.

In line with the market, TMT Investments (TMT:300¢), a venture capital company with a portfolio of more than 55 high-growth, internet-based companies, has continued to see divergence between its stronger and weaker performers.

Indeed, there were significant revaluation uplifts on new funding rounds for several portfolio companies as investors continue to back fast-growing, high-quality digital technology companies. 1Fit, a mobile app providing users with access to multiple gyms and yoga studios in Central Asia, completed a new SAFE funding round that led to a 216 per cent uplift to $1.6mn in the value of TMT’s 4.7 per cent stake. Collectly, a patient billing platform for medical organisations, completed an equity raise that more than trebled the value of TMT’s 3.23 per cent holding to $6.4mn.

However, there were $5.2mn of write-downs on four unlisted portfolio companies, too, a reflection of the negative impact of the current macroeconomic environment on their businesses. The impairments accounted for 76 per cent of their average carrying valuations at the end of 2022. Also, TMT took a 28 per cent hit on its 10.39 per cent stake in Nasdaq-quoted cloud storage group Backblaze (US:BLZE). The holding is now worth $16.2mn (51¢).

This is part and parcel of investing in early-stage technology companies, as is seeking out new investments to uncover the next unicorn. TMT made $0.8mn follow-on investments in four exiting holdings, including Cyberwrite, an artificial intelligence (AI) cyber insurance platform providing cyber security insights and risk quantification for businesses. Since the period end, the group has also invested $0.2mn in Mobilo, a smart digital card solution, $1mn in fashion and sports AI chat platform GameOn, and $0.5mn in Phoenix Health, a Canadian direct-to-consumer health platform for men. TMT still holds $7.8mn (25¢) of net cash so is well funded.

It’s worth noting that TMT's 1.3 per cent stake in Bolt is being very conservatively valued. It was revalued upwards by 2 per cent to $71.2mn (227¢) even though it had a read-through valuation of $103.3mn following Bolt’s €628mn (£555mn) fundraising round in January 2022. Moreover, the share price of its closest comparable, listed rival Uber Technologies (US:UBER), has surged 81 per cent this year to above the level in January 2022, recouping all the paper losses in last year’s tech rout. Bolt continues to record double-digit annualised revenue growth, too.

The point is that the stake in Bolt, cash and the listed stake in BackBlaze are cumulatively worth 303¢, so back up all of TMT’s share price. That leaves more than 50 investments in the price for free, a ‘margin of safety’ that made the shares a shoe-in, at 285¢, in my 2023 Bargain Share Portfolio. That’s still the case with the shares priced on less than half book value. BUY.

[waterfall city] 30/3/2023 12:42

Tmt and Grow stand out from a discount perspective, are they comparable?