Short Term Trading Weekend Lounge: 17-19 Nov, page-75

Won't make this a STT tip but nevertheless hopefully an informative post for the readers here (copied and pasted from FGF threads):

Have noticed a few rogue posters coming into the FGF forums now that FGF has run and provided multiple bags already. I wanted to clear a few misconceptions in this post so new investor's here can get both sides to the story. Have put one of Scooby's posts below in italics and then my response beneath.

"Hi,
What are you actually thinking FGF plan to do? To date, they seem to offer a little cash here and there to unlisted entities. And what other investments they make, they have lost out on recently.
From the FGF webpage

The company plans to continue as a Listed Investment Company (LIC), seeking additional investment opportunities in a variety of asset classes, be they in listed or unlisted companies, in which it either believes they are significantly undervalued, or where it believes it can add value through investment and management expertise.
The company will seek small investments, of not greater than $500,000, in unlisted entities that it deems have significant upside and have the potential to be listed. As such it proposes to be an incubator for small companies that can be taken to a Stock Exchange Listing, and then to support those companies post Stock Exchange Listing

So just run me through the numbers once more.

The $350,000 they have in Pearl Global will probably get dumped upon relisting on the 29th December. almost 4 months late and still only a prototype idea.
And Cloud Lumen will probably offer up the same profit once listed in 2018

This is an investment company who said in their latest annual report they doubled their LOSS from $481k in FY16 to $872k in FY17 due to "Trading loss on investments and increased operating costs" Isn't the aim of an investment firm to make money not double their losses???
And if you happily swallowed an increase in operating costs for 3 blokes and a shared secretary then you are extremely naive.  Why have you not questioned the Board doubling their wages at the same time they doubled their loss from $148k in FY16 to $400k in FY17? do you think that was deserved?
Literally all this company has done is mention the word "Blockchain" and the heard think these guys are about to build the next Bitcoin.  If history is to repeat itself , then the  Top20 holders who are related to the Board but not disclosed are the ones who have probably been selling their shares off the Pump whilst the rest of you will be caught holding nothing but a loss. The share price is only at 2.2 today because someone is selling and some poor bugger is buying. You may have held since 0.9 and made a bag but i feel for the people buying at these high levels.
I was once like some of you, couldn't stand some one coming onto the XPE forum screaming from the rooftop that certain members of the BOD are less then desirable, i just wanted the sentiment to be positive or the stock would never go up. I can speak for a lot of people who say i wish we acted sooner and listened more. This is CMY quality stuff."



Clearly you missed the run from .007 and are a little bitter but that's fine - if you need clarification i'm happy to provide it.

You are looking directly in the rear view mirror - we are here for the NEXT investment that FGF makes. I couldn't give a toss if it made a loss in 2011, 2012, 2013 and whatever other year in the past. The blockchain space is HOT and these guys are right at the forefront. We are in a position where we are suspended for a week before the AGM because they've said material news will be out before then - almost any other company that "mentions blockchain" as you say will likely have months of suspension time given a change in the nature of the business. RFN is an example. This is extremely valuable in itself - not any average joe company can simply announce a blockchain acquisition without consequences.

You are screaming from the rooftops that FGF is astronomically overvalued, lets look at the facts with our peers:

BPG = $25m EV
DCC = $90m EV
RFN = $15m EV (suspension risk)
FGF = $15m EV
OOK = $10m EV (suspension risk)

That doesn't look particularly overvalued to me. DCC had our market cap a matter of months ago and look where they are now with some blockchain based activity. BPG the same. This is all to come for FGF in the next 7 days and shortly beyond. Cry all you want but FGF is not overvalued in comparison to peers.

Now Directors. Everyone here is having potshots at our Directors. The same ones that produced 20 bags for XPE from shell status. What they did from the highs I couldn't care less. We are not buying in post-acquisition here - we are a shell therefore I will compare XPE's performance from when it was a shell. Very important distinction. Our biggest holder here is Geoff Barnes (FGF Chairman) through Geba Pty Ltd. Shareholder interests are directly aligned to the Board - regardless of past performance nothing speaks louder than $. These guys will do everything in their power to bring value to this company - it's in their best interests.

That leads me to the options expiry. If the Board ensures a SP over 2c by Feb '18 they will receive $8.7m on expiry. Do you think they will just let this pass? Hell no. Any sort of blockchain acquisition will virtually ensure that this money gets pocketed by the company and so at a minimum we should be seeing 2c here in February (likely multiple times this). Geoff holds a stack of these personally. Again - interests aligned with ours. Tick.

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Next important point is who has been buying FGF lately? If it's so overvalued as you say it would likely have been retailers buying and pros selling right? Wrong.
The pros have been vigorously accumulating this for weeks. Shaws have bought over 10 million on market in the past couple of weeks and they are just one of many pros onboard here.
Its only retailers selling.

Bitcoin just smashed through A$10k to all time highs. The space is HOT. Sit on the sidelines all you want thats fine by me I couldn't care less but I felt its important that people have the actual facts not just comparing past P&L performance for a shell and looking in the past with no eye to the future.

Hopefully cleared up a few misconceptions. Good luck to holders. Here's to a good few months.