Trackwise Designs Share Discussion Threads

[nw99] 29/11/2020 12:36

I will apply for as many as I can afford in the Open Offer.

[timbo003] 29/11/2020 09:43

I am reasonable happy with the responses to the questions on the fund raising, I asked some of the more challenging questions (including the one about changing the broker) as I think provocative questions are most likely to bring out the most detail.

They clearly have first mover advantage in a number of new, potentially enormous growth areas and from the comments made about potential competition and their own IP, it looks like they are in a good position to maintain that advantage for some time to come.

On that basis and assuming the price stays comfortably above the placing price for the next few days, I intend to apply for around 10X my basic entitlement in the open offer.

[nw99] 29/11/2020 09:24

Really good investor presentation.Increase capacity with future demand and the new large order up to £38M might be worth a lot more he said .EV,medical and Aerospace .

[ped2323] 28/11/2020 11:47

No wonder they settled for a 45% discount on the placing. Perhaps they thought he was signing TWD up for a 4.5% discount .

[ped2323] 28/11/2020 11:43

WTT. I posted similar comment on L-S-E regarding comment about £135k per private investor. Doesn’t inspire confidence does it in the chief finance officer that he can be that ignorant or incorrect in such a simple matter?

[w t tutte] 28/11/2020 01:07

If contracts roll in they are clearly going to need to raise money again which is not a problem for a growth company, but they need to quickly understand that they are swimming with sharks who will rip out large chunks of value for themselves or their chums. They need to put an decent ex ECM banker on the board as soon as possible. Also by Mr Thompson's 135K comment there are only 81 PIs, I dont think that is correct, I wonder if he understands that many individuals turn up on the shareholder register under nominees ?

[timbo003] 27/11/2020 19:02

The recording of the Webinar and the slides are now available, that was quick!

[hydrus] 27/11/2020 18:33

It did sound a bit like oh well the investors knew we needed the money so they drove a hard bargain. Umm well that's the same with every fund raise. Feels like there is a bright inventor with a good product but unclear business acumen. A hold for me for now but with less conviction.

[binglem] 27/11/2020 18:23

There is a lot to like about the company, they have patented disruptive tech and a groundbreaking contract with Arrival. CEO has Large equity interest and other very reputable investors. Can anyone give me some comfort on potential margins?

[binglem] 27/11/2020 18:20

Personally I thought that the CFO sounded a bit poor and way too much time was spent on the raising. What I’d really like to understand is the rough margins on the last contract or even anticipated margins on their product. Any clues? CFO clearly lacks a bit of commercial nous in being blindsided by the raising price.

[timbo003] 27/11/2020 18:01

That was a very informative Webinar and I think the Directors did a good job fielding the many questions they had on the funding and on the size of the discount.

Mark Hodgins (CFO) seeemed quite confident that private invetors could apply for a decent amount of shares in the OO and not be disapponted with their allocation.

Also he did a good job at putting to bed a suggestion by one shareholder that private investors could have provided all the funds at £3/share by revealing that it would mean that PIs would have to provide (on average) £135K, he went on to say that as much as he would like it if PIs could do this, he didn't think it would be very likely that they would be willing do this.

[amt] 27/11/2020 13:41

I don't blame the Directors. They have also lost out.
Its the whole system that stinks.
Heavily weighted against private investors.
It's a very closed market.

[timbo003] 27/11/2020 12:38

Just had a quick look at some of the recent placing anouncements by finncap and Cannacord

Cannacord always seem to reference the size of the discount to the closing price onthe last practicable date before the announcement


finncap sometimes reference the size of the discount to the closing price on the last practicable date before the announcement (see placing details for Access Intelligence and Attitude Group) and sometimes it is referenced to a weighted average over a few weeks prior to the placing announcement (see recent placing details for Avacta and Synairgen)

[timbo003] 27/11/2020 10:22

The comparison of the two fund raisings (Mirriad and Trackwise) is certainly interesting

These are the two statements from the placing announcements used to justify the discounts

Mirriad
The Company intends to conditionally raise approximately £23 million (before expenses) through the issue of the Placing Shares at the Issue Price, which represents a discount of 5.9% to the closing middle market price of 42.5 pence per Ordinary Share on 25 November 2020, being the last practicable date prior to the announcement of the Fundraising.

Trackwise
Issue Price of 200 pence represents a discount of approximately 7.9 per cent. to the volume weighted average price of 217.17 pence per Ordinary Share for the period of 18 September 2020 to 19 November 2020, being the date on which the Company recently announced a new manufacturing agreement with an EV OEM through to the Business Day prior to the announcement of the Fundraising.

Why does one broker (Finncap) use a Volume weighted average to justify the price and the other (Cannacord) use a closing middle market price from the day before the announcement? Is this the usual methodology used by both brokers? It would be worth checking if Finncap routinely use this volume weighted average method, or whether they sometimes use methods akin to that used by Cannacord in the case of Mirriad.

Generally speaking, I think a volume weighted average over a period of time before a fund raising announcement will work better in most cases as it provides more certainty for the placees and the company on the fund raising and it avoids any nasty surprises for existing shareholders if there is sudden irrational spike down in the share price in the days immediately before the placing announcement.

[viking24] 27/11/2020 10:05

Presentation starts this afternoon, interesting to hear more about the order book and Arrival

[andyview] 27/11/2020 08:39

You make valid points and yes the placing was underpriced and the open offer could have been a bigger slice of the pie but funds have been raised, placing oversubscribed and the open offer i'm sure will be.

The price had accelerated up quickly and so the company were probably advised to do a vwap over a prolonged period.

For me the company is in a better position to move forward and I've taken the opportunity to add to what was an initial foray the day before the placing was announced.

Maybe buyers back today and we can begin to move back up


gla

[binglem] 27/11/2020 08:38

Sentiment seems pretty low here. Personally think that the price ran away a bit pre placing - partly due to limited shares o/s and tight float. In my experience, much more comfortable to invest where the board have proper skin in the game! Exciting space.

[w t tutte] 27/11/2020 07:38

Timbo003, you make a good point about the dilution of Mr. Johnson, I think you can also turn this point around and say why was the founder and largest shareholder NOT prepared to pay 200p per share for expansion capital. I get that there are potentially handfuls of reasons why Mr. Johnson did not pony up. From the fact that he does not see value, through to the fact that he is a man of principal and did not want to profit if smaller shareholders did not profit. Whatever his reason is, it would actually be good to know, as provides very useful insight to TWD shareholders. It will be interesting to see if he takes up his rights.

[w t tutte] 27/11/2020 07:25

Lets hope it is a learning experience for management and they never repeat these mistakes again. However even if 200p is the right price for the placement (its not but lets assume it is) they have made an absolute pigs ear of the whole process. Firstly, they have raised far more cash than they tell us they need (given the proposed use of proceeds) there by increasing dilution, secondly they have pulled out of thin air the 1:44 open offer why 1:44 and not 1:22 or 1:100 for that matter. Why because they thought it would be a sop to existing holders. If all of the placement had been to a strategic investor then I get the 200p and the dilution but they have been done by their advisors, no doubt with a narrative like increase the free float or attract institutional investors. The final straw is the decided not to bother actually explaining anything to the market and only when they could see the share-price was tanking did they decide to have an Investor meeting. Anyone could have told them as soon as this was announced that they should have at very least been on proactive investors or an equivalent. They maybe Trackwise but they most certainly are not Marketwise. They need to revamp the board and bring on some market experience, none of the board and especially the Chairman are up to the task of running what this company could become. A small engineering firm below 100M market cap, they are fine for that ... but they should be tooling up for what they might/will be and the board is completely unsuitable for this. Being a public company is a step learning curve If they learn form this mistake I can forgive them if they don't I will probably not hang around.

[someuwin] 27/11/2020 00:01

...That's the concern though. Tech co MIRI can get £23m + £3m placing away today at 5% discount. But Tech co TWD could only manage £11m + £1m at a ludicrous 45% discount last week. Why?

[timbo003] 26/11/2020 23:41

To add a little perspective, it is worth remembering that the individual who has suffered the biggest paper loss through the large discount on the placing is the CEO, Philip Johnston, who (with his wife) owns 30% of the company shares. I do not think he would have agreed to go with such a large discount if he had reason to believe that they could have raised cash at a significantly smaller discount, or by some other cheaper means.

[az4hr] 26/11/2020 23:05

twd management pure scum absolutely fuming what an absolute car crash seething

[amt] 26/11/2020 21:49

Good spot someuwin.

[someuwin] 26/11/2020 21:31

Just to show that you don't have to rip off existing investors with a 45% discounted placing as TWD did...

MIRI has risen from 6p in March to 42.5p today.

After the bell they've announced a £23m placing and £3m open offer at 40p. That's the way to do it properly!