(1) 2 Hedge Funds' large positions in SRS but very different holding costs:
Hishenk: currently holding 11.97% and its ave cost should be AROUND 4 cents.
Tables below are my calculations which should be about right but not precise because I can only see the change for each buy date from ASX announcements so I generally use the closing price of the day.
Column 1
Column 2
Column 3
Column 4
Column 5
Column 6
Column 7
1
Hishenk
Prev
Current
New Buy
Ave price
Total consideration
Voting Power
2
3/03/2016
70,950,000
79,650,000
8,700,000
0.031
$269,700
11.97%
3
6/10/2015
61,400,000
70,950,000
9,550,000
0.032
$305,600
10.67%
4
2/07/2015
57,176,000
61,400,000
4,224,000
0.024
$101,376
9.23%
5
24/04/2015
48,100,000
57,176,000
9,076,000
0.036
$326,736
8.60%
6
7/02/2015
40,760,000
48,100,000
7,340,000
0.039
$286,260
7.23%
7
7/10/2014
33,610,000
40,760,000
7,150,000
0.05
$357,500
6.13%
8
Sep-14
33,610,000
0.044
$1,478,840
9
Total Cost
$3,126,012
10
Net Ave Holding Cost
$0.0392
Allan Grey: currently holding 18.46% and its ave cost should be AROUND or PROBABLY ABOVE 68 cents.
Column 1
Column 2
Column 3
Column 4
Column 5
Column 6
1
Allen Grey
Prev
Current
New Buy
Ave price
Total consideration
2
6/03/2015
111,432,010
111,814,965
382,955
0.017
$6,510
3
2/03/2011
105,204,807
111,432,010
6,227,203
0.44
$2,739,969
4
6/12/2010
98,734,168
105,204,807
6,470,639
0.42
$2,717,668
5
26/12/2010
92,642,231
98,734,168
6,091,937
0.405
$2,467,234
6
18/11/2010
85,821,531
92,642,231
6,820,700
0.415
$2,830,591
7
19/10/2010
78,245,220
85,821,531
7,576,311
0.42
$3,182,051
8
23/04/2010
84,754,846
78,245,220
-6,509,626
0.82
($5,337,893)
9
15/04/2010
91,139,345
84,754,846
-6,384,499
0.765
($4,884,142)
10
21/10/2009
84,787,040
91,139,345
6,352,305
0.575
$3,652,575
11
14/10/2009
76,125,250
84,787,040
8,661,790
0.64
$5,543,546
12
10/08/2009
69,948,933
76,125,250
6,176,317
0.48
$2,964,632
13
3/07/2009
63,610,957
69,948,933
6,337,976
0.405
$2,566,880
14
22/06/2009
57,033,937
63,610,957
6,577,020
0.445
$2,926,774
15
3/06/2009
50,773,033
57,033,937
6,260,904
0.505
$3,161,757
16
22/01/2009
43,928,949
50,773,033
6,844,084
0.485
$3,319,381
17
7/01/2009
37,569,425
43,928,949
6,359,524
0.685
$4,356,274
18
19/12/2008
22,729,231
37,569,425
14,840,194
0.72
$10,684,940
19
15/07/2008
22,729,231
1.44
$32,730,093
20
Total Cost
$75,628,839
21
Net Average Holding Cost
$0.68
(1.1) About Allan Grey
It is hard to say Allan Grey's interest is in line with shareholders like those whose cost is sub 10 cents. But after all these years, if Allan Grey still rejects to face the reality and cooperate with Prefs to solve the zombie capital structure, its shareholding's value is going no where. Blue Pacific said it values SRS at around $150 million. Say if we ordinary shareholders get 20% of the company in the end, that's around $5 million left for Allan Grey ($150*0.2*0.18) which implies 93% loss [(75-5)/75] which is still better than nothing in terms of absolute amount. So to imagine that SRS could go back to good old days is just dreaming as well as prefs would simply suddenly nicely go away and leave all the assets to ordinary shareholders. I think there is 70% chance Allan Grey will come to its sense considered that Prefs now grabs ordinary's dick, threatening conversion.
(1.2) About Hishenk
What makes me curious is that even after Blue Pacific published its letters on 7 September 2015, Hishenk somewhat still topped up its holdings twice each of which is not an insignificant amount compared to its pre-conversion-threat parcels. And what's more interesting is Hishenk who has 12% in common stocks is not in the top 20 preference shareholders list which this year is published in PXUPA's annual report. So it is a one way bet for Hishenk just like me but not like Blue Pacific who is both an ordinary and preference shareholder(although I don't know its exact holding position). I am not saying following Hishenk is an absolute wise move but its shareholdings position is substantial and its average cost seems even a bit higher than me. Me, like I said earlier in the other thread, quite ignorant failing to realize the risk of the conversion threat. Hishenk could simply be as ignorant as me when it did the 2 purchases in Oct 15 and Mar 16 respectively. Or it could know sth!
(1.3) About the value after split in 80/20
Apply the above valuation, 80/20 split will value SRS' current common shareholders around $30 million($150*20%) which is about the net cash value and the current market cap is fluctuating between $17 million to $20 million. So margin of safety is still high in the 80/20 case where I think share price could be going to 4.5 cents approximately.
(2) I guess no litigation but on-going negotiations at the moment.
The spending in legal fee could be largely or at least partly due to the Europe winding up processes. If there is a current proceeding on going, it is absolutely required to disclose in both of SRS and PXUPA annual reports because everybody knows the conversion threat is a significant matter which could wipe out the current shareholders value. And the Directors should know very well what those financial reporters are capable of... Should there be a litigation filed to the Court, there is no way the Company would stupidly choose to cover it up just simply be not mentioning it in the annual reports. The probability is low, say lower than 5%? (But again..I have to say, this board is kind of stupid...otherwise they wouldn't make such buy-back-trigger-conversion mistake, would they? lol... just for a few $100k money...)
So I'd say on-going negotiation is more possible...
But what I don't quite understand is that SRS itself is the second largest unit holder of PXUPA! Is there any observation for this? What's the pros and cons?
