Finance The losses year after year lessened my enthusiasm.
As a percentage of costs, funding costs have been dropping, but impairment costs have been rising. Other costs look stable and it seems they got their admin costs under control in FY2019. I wonder what other fat they can trim.
Expenses were 155%, 151% and 141%of their net income between FY2018-2020, so while the downward trend is positive, at the current rate (averaged) it would take 12 years to break even, assuming everything else remained steady.
Risk Daniel Foggo and Glenn Riddell should make sure never to fly on the same plane. The key person risk seems especially high for Plenti, and the idea that the company losing them can trigger a stop funding event from the Warehouse Lenders feels like a ticking time bomb.
Gameplay 18,000,000 shares held by the RMML Nominee will be distributed to the RMML Shareholders as escrowed shares.20% of these shares will be eligible for sale on or after 30/09/2020, provided the share price is at least 50% higher than the Offer Price based on a specific calculation involving a 10 trading day average.Considering that Plenti is expected to commence trading on 23/09/2020, this means that potentially 3,600,000 shares will be dumped as early as 6/10/2020.
It looks like its been primed for a quick flip and the mere anticipation of this will probably drive others to seek stag profits. Not surprised that the big players jumped in immediately.
Conclusion I want to like Plenti, and would gladly hold it for 12 years if an early sell off were not imminent and the key person risk could be reduced, but it does not appear to be the case. Therefore, I will follow the trend on this one and sell a day before the partial release conditions are likely to be met with some hope of buying back in under the offer price.
