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54.5¢ slater & gordon limited

Profitable or not is just news in the grand scheme of things....

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DoesItMatter

4 Posts.

11/07/17

11:46

Post #: 25788762
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Originally posted by HK1 ↑

There are a few opinions here where are factually incorrect:
- This has not removed all pending bad news for the company. We still don't know if the company is cashflow positive or is making a profit. Also, the recapitalisation has not been approved yet.
- "We" are going after Quindell. The Quindell/WTG lawsuit has effectively been ring-fenced by the new owners. So the current shareholders (the "We", i assume you mean) will see no benefit of this.
- CA for places like Manus? This is immaterial and irrelevant - this is BAU stuff for S&G. Although it would be nice for SGH if there could stop the revenue decline.
- The lifeboat from Anchorage? You may want to read the recapitalisation agreement and the HC thread about it. A 96%+ dilution is not a lifeboat.

This announcement has no material effect to SGH - it was always going to end one of two way, either going to court for years, or payout from insurance. The insurance company has rolled over (for the "unexpectedly low" insured amount) and the new owners have played their hand perfectly (as well they should, they are the experts on this after all). If you are a current shareholder, you should take note of this play by the new owners - they are three steps ahead of everyone here and know exactly what they are doing to maximise their profit.

The current share price (of 7.8c) values the new company at about $680m. And remember all the downsides to current shareholders regarding the new Warrants and Convertible Notes.

This announcement is good news for Anchorage and its partners. The current shareholders position is unchanged from last week - still in a boat, on a river, with no paddle and not knowing what is around the corner.

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Profitable or not is just news in the grand scheme of things. Dilution is still better than liquidation for current shareholders, hence the lifeboat metaphor. Rather be in the game than dead. The bad news that was known about is now gone. Sure more bad news can appear, as always the future is unknown.

It's over the moon news for Anchorage, no doubt. But it is not bad news for current shareholders. SGH shareholders are in a better position today, than last week. This all depends on when you entered the race don't forget

Last edited by DoesItMatter: 11/07/17

SGH Price at posting: 8.3¢ Sentiment: None Disclosure: Held
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