Vpc Specialty Lending In... Share Discussion Threads

[chucko1] 26/10/2021 11:02

They do have a lockup period, but I am sure various investment banks will be talking to them about hedging. We know nothing of any legal restrictions on forward sales, options or total return swaps etc. that test their ability to preserve value, which of course is the fiduciary duty of the Board!!

They have multiplied their original investment circa fifty-fold. I know I would be hedging if I could.

[killing_time] 26/10/2021 10:54

ctrader3, true but the NAV update on Friday will be for month ending September.

This will show in Novembers update.

[redhill9] 26/10/2021 10:53

Perhaps a silly question: it's stated that "Class A Common Stock shall be subject to a one-year post-closing lockup unless otherwise accelerated based on average trading performance measured six months post-closing." but does anyone know if this lockup restriction also applies to the private placement warrants?

Not enough of the details included in this morning's announcement to know. The comment refers to them expiring after 5 years but can they be exercised now, and if so would a similar lockup apply? Just wondering if there's any way VSL could cash in some of this gain in the short term, should they want to of course.

[badtime] 26/10/2021 10:48

Only just logged in ...NICE

[ctrader3] 26/10/2021 10:45

VPC normally updates the NAV at the end of the month
which is Friday.

[spectoacc] 26/10/2021 10:45

"The Company's Class A Common Stock shall be subject to a one-year post-closing lockup unless otherwise accelerated based on average trading performance measured six months post-closing."

But no mention of the presumably-not-traded special warrants having any lock-up, in this morning's RNS?

Or does exercising - ie converting - them count as now holding locked-up Class A shares?

@chucko1?

[epistrophy] 26/10/2021 10:43

Sponsor shares are locked up for at least 150 days I believe.

[spectoacc] 26/10/2021 10:21

@kinbasket - if it was just a meme stock, then yes.

But look at the last 24 hours of announcements from RKKT - this could have legs IMO.

In the meantime, VSL is trading nowhere near the NAV increase.

[chucko1] 26/10/2021 10:16

Recall that Liberum are using a BKKT price of 30.60. It is now 39.5.

It has fallen from its high of 52. But that 17% is more like 25% increase.

[spectoacc] 26/10/2021 10:14

Very early days but RKKT holding the pre-market gains so far.

Could go a lot higher IMO.

Interesting the discount it's in the VSL a/c's at - so you've the discount, the RKKT share price rise, and the discount VSL trades at, as well as the warrants massively in the money (God knows what premium they'd be on after that move!).

And an 8p pa divi.

[skinny] 26/10/2021 10:00

Thanks for that.

[davebowler] 26/10/2021 09:41

Liberum;
Material NAV uplift from Bakkt’s 234% share price increase

Mkt Cap £252m | Share price 96.8p | Prem/(disc) -24.8% | Div yield 8.8%

Event

Bakkt's share price rose by 234% yesterday following its partnership agreement with Mastercard. Under the agreement, businesses and banks will be able to buy and hold cryptocurrency and issue branded crypto debit and credit cards. Bakkt is a digital asset marketplace launched in 2018 by Intercontinental Exchange. It will provide custodial services under the agreement with Mastercard. Bakkt launched three years ago enabling institutions and consumers to buy, sell, store and spend digital assets. VSL invested $2.7m in a SPAC that acquired the business and the book value of VSL's investment was $21.5m at 30 June 2021 (5% of NAV).

Liberum view

We estimate a NAV increase of c.17% for VSL based on the latest share price for Bakkt and assuming a c.20% discount to account for the lock-up period. Under the valuation policy, the equity investments in SPACs are held at a discount after the deal announcement and through post-close lock-up periods. The transaction closed earlier this month and the lock-up period for VSL's shares is one year. The shares have risen by 7% this morning and we expect the discount to narrow from the current 25% pro-forma discount.

[spectoacc] 26/10/2021 09:30

Clarification, but not enough for those not in the know:

"As at 31 August 2021, Company valued the common stock at US$15,528,166, a 30% discount to the closing price of US$9.99. The Company's Class A Common Stock shall be subject to a one-year post-closing lockup unless otherwise accelerated based on average trading performance measured six months post-closing.



The private placement warrants, which differ from the publicly listed warrants, maintain a US$11.50 per share strike price, provide for cashless exercise and expire five years after closing of the transaction. The private placement warrants continued to be valued using an option pricing model. As at 31 August 2021, the Company valued the private placement warrants at US$5,902,096.
"

[ctrader3] 26/10/2021 09:29

VPC Specialty Lending Investments PLC (the "Company")

Update Regarding its Holding in VPC Impact Acquisition Holdings Sponsor, LLC



The Company notes that on 15 October 2021, Bakkt Holdings, LLC, the digital asset marketplace founded in 2018, announced that it completed the previously announced business combination with VPC Impact Acquisition Holdings, a special purpose acquisition company sponsored by VPC Impact Acquisition Holdings Sponsor, LLC ("VPC Sponsor"), an affiliate of Victory Park Capital ("VPC"). The combined company now operates as Bakkt Holdings, Inc. ("Bakkt," the "Company"), and Bakkt's shares of Class A common stock and warrants began trading on the New York Stock Exchange under the ticker symbols "BKKT" and "BKKT WS", respectively, on 18 October 2021. Through VPC Sponsor, VPC Specialty Lending Investments PLC owns 2,220,530 Class B Shares and 2,697,467 private placement warrants, with a cost basis of US$2,713,994. For more information on the business combination, please find the press release here.



Upon the consummation of the transaction, the Company's Class B Shares were automatically converted into one share of Class A Common Stock of Bakkt. As disclosed in the June newsletter, these shares are valued at the closing price as of the valuation date, with a discount applied through the post-close lock up period. As at 31 August 2021, Company valued the common stock at US$15,528,166, a 30% discount to the closing price of US$9.99. The Company's Class A Common Stock shall be subject to a one-year post-closing lockup unless otherwise accelerated based on average trading performance measured six months post-closing.



The private placement warrants, which differ from the publicly listed warrants, maintain a US$11.50 per share strike price, provide for cashless exercise and expire five years after closing of the transaction. The private placement warrants continued to be valued using an option pricing model. As at 31 August 2021, the Company valued the private placement warrants at US$5,902,096.

[colonel a] 26/10/2021 09:24

If VSL were able to hedge the BKKT position I would want them to.

[ctrader3] 26/10/2021 09:09

pleased to see chucko1 here, judged on another board his research
is worth reading.

[chucko1] 26/10/2021 08:33

Even if BKKT falls to zero, the NAV is around the current share price.

If you fully value the BKKT holding as well as the warrants (not employing the 30% discount), the NAV is somewhere around 145-160p.

This ought to go up a lot more.

[spectoacc] 26/10/2021 08:29

Completely agree @CWA1.

As @chucko1 points out tho, BKKT is clearly more than a meme stock - fantastic for us VSL holders.

[cwa1] 26/10/2021 08:20

As someone that was already overweight here, I bought a few more yesterday on the grounds that I'm STILL getting what I came here for(yield, discount to NAV, management, etc), with the SPAC angle thrown in, essentially, for free .

As a simple VSL holder I concede that I can't quite get my head round what's going on here as you say chucko1. And, like yourself, I seem to have unknowingly sleepwalked in to being a SPAC investor :-)

Will be interesting to see how it pans out but, hopefully, even if it all turns to dust I will still have a strong and stable(Copyright Theresa May) underlying investment to fall back on

[chucko1] 26/10/2021 08:11

Not only do they have the A shares valued at $10 (and with a 30% discount), but there are also the warrants with a strike price of $11.25 which I think are marked at zero. Whatever they are marked at is pretty irrelevant at a now BKKT price of $52 (without it being a meme stock).

People ought to be buying more heavily this morning than they have so far, but maybe most VSL holders simply cannot get their minds around what has gone on here.

Like most others, I bought for the credit thesis and the strong and dependable dividend. I have become a SPAC investor unwittingly.

[chucko1] 26/10/2021 08:02

At $52, the NAV should be around 140p