AML - Stock Market Listing

AML - Stock Market Listing

Author
Discussion

Ken Figenus

5,678 posts

116 months

Saturday 9th November 2019
quotequote all
Always thought IPO was heavy and wanted no part for several reasons. However I bought some shares when they went towards £4 and sold them again when all I kept seeing the perpetual camo slabby DBX shots. They now seem to have nailed that interior, befitting of comparables and the price tag. Knowing what I know now I sincerely hope to feel like buying the shares back after the DBX preview viewing. This is like insider info almost! Then they act on fan boy feedback and give the Vantage a tweak or two - Buy Buy Buy smile


B4rnst4ble

790 posts

148 months

Saturday 9th November 2019
quotequote all
pschlute said:
The stock has risen over 10% since he wrote that. But how much has it declined since float ?

You are being very disingenuous.
Totally agree with you pschlute
It gets tiresome reading that just because we aren’t in the city we know nothing, the whole share issue has reinforced my thoughts of those in the know .

Jon39

Original Poster:

12,782 posts

142 months

Saturday 9th November 2019
quotequote all

Ken Figenus said:
Knowing what I know now I sincerely hope to feel like buying the shares back after the DBX preview viewing. This is like insider info almost! Then they act on fan boy feedback and give the Vantage a tweak or two - Buy Buy Buy smile

When you are about to call your stockbroker Dewi, say to yourself, debt £800 million - how many DBX sales are needed.


pschlute

714 posts

158 months

Saturday 9th November 2019
quotequote all
B4rnst4ble said:
Totally agree with you pschlute
It gets tiresome reading that just because we aren’t in the city we know nothing, the whole share issue has reinforced my thoughts of those in the know .
Those "in the know" very often know f*** all

DickyC

49,547 posts

197 months

Saturday 9th November 2019
quotequote all
Gettin' loud.

Jon39

Original Poster:

12,782 posts

142 months

Saturday 9th November 2019
quotequote all

avinalarf said:
I prefer to follow the advice of an expert in the field,such as Neil Russel Woodford CBE,and use his extensive knowledge of the markets to lose my money for me, wink

Hopefully a good subtle joke Steven, otherwise commiserations.

A most peculiar situation. Mr Woodford was with Invesco for 25 years and during that time he followed a simple proven investment strategy, promoted by Warren Buffett and which I also have used for 30 years. Majority of holdings in very large non-cyclical worldwide businesses, paying good (hopefully) increasing dividends, and retaining those same holdings for long periods. With that strict criteria, it meant having no involvement with the dot com bubble, and in the 2008-09 crash the non-cyclicals helped by having smaller declines than average.

Presumably the customers of his new firm assumed he would continue in the same way. I did not follow what was going on closely, but it now seems that he completely changed his investment strategy and bought into tiny businesses. Having succeeded for 25 years, why change to gambling with risky bets on young small firms?

It was perhaps akin to the dot com bubble, which he was proud to have understood and avoided. You could have then bought into 100 fledgling tech companies, and if just one of them was a Google or Amazon, it didn't matter that 99 went bust, but what a gamble, because you would have been more likely to have missed the lucky one.



pschlute

714 posts

158 months

Saturday 9th November 2019
quotequote all
Jon39 said:



Having succeeded for 25 years, why change to gambling with risky bets on young small firms?
Failure to understand this point is failure to understand how the city works.

He is nearly 60. He had perhaps 5 or 10 years left as a fund manger. His previous strategies whilst successful in the long term perhaps would not have given him the instant hit he required to get the big payoff before he retired. So he took a punt.

When I was trading, any bonus payment awarded would be paid out in thirds over three years and subject to 100% clawback including already paid. This was to ensure I could not make inflated profits on an instrument which would disappear just as quickly.




Edited by pschlute on Saturday 9th November 20:37

hyphen

26,262 posts

89 months

Saturday 9th November 2019
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Jon39 said:
Having succeeded for 25 years, why change to gambling with risky bets on young small firms?
Was he able to?

At larger companies, the remit of a fund tends to be tightly defined, so imagine he was not allowed to place more than x percent into random stuff. Appreciate he was a star name so will have had some freedom, but don't know how much.

Edit: just read the previous answer which makes sense, but still curious if he had the freedom at Invesco.

CB07

525 posts

232 months

Saturday 9th November 2019
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Just to allay some comments that certain folk are disingenuous as it feels as if its getting a little tense in here (again). Apologies in advance if I half touched on this a few pages back. FWIW I also work in 'the city', commodity derivatives for my sins. I will readily admit I haven't pored over the docs or even intend to. I have no axe to grind wrt the valuation of AML.L, no skin in the game and as a relative junior (12yrs) in the city certainly wouldn't be so bold as to count myself as an expert in my chosen field, leave alone stocks and shares.

However, I am firmly of the view that no amount of expertise, research notes, percieved condescension from experts etc can refute the fact that 'the market' values AML.L at 467p. It doesn't take a mathematical genius, rocket scientist, or city trader to tell non financial folk this fact or for them to act on that information. Grab an FT and it is in black on pink then just call your friendly broker (ahem). More likely for most non financial professionals these days one can open an iPhone and manually adjust ones portfolio accordingly, book some profit, take a loss, hold or maybe even BUY for the first time.. whatever floats your boat.

Nearly everything gone before this point in time (Friday Market close and thus that print of 467p) is irrelevant to value going forward. Be it the vantages nose, the recent DBX interior shots, P/E ratios, crikey even the reporting of last weeks torrid results can reasonably be thought to be priced in by 'the market' and therefore second hand news.

And so we simply come to the question of who 'the market' is that you hear the professionals refer to. Well unfortunately for said experts, us and them, doesn't hold much water. 'The market' is an all inclusive notion, from Dave with his certificate, the honourable gentleman of this forum in between, right up to Crispin Odey betting the house at the top. Everyones opinion counts. They make up the market.

Higher prices can (as a rule of thumb) be viewed as positive for all. Sadly the fact stands that if enough of that market felt the price should be higher, quite simply it already would be. Anything further is conjecture and analysis, or 'opinion' if you will. Unless I am missing something glaringly obvious about the firm and its value (and I asked before to be corrected about that) expert or not the only real absolulte data you have at your disposal RIGHT NOW, is that an absolutely massive amount of people view our beloved AML.L to be worth roughly a fiver a share..


avinalarf

6,438 posts

141 months

Sunday 10th November 2019
quotequote all
pschlute said:
Jon39 said:



Having succeeded for 25 years, why change to gambling with risky bets on young small firms?
Failure to understand this point is failure to understand how the city works.

He is nearly 60. He had perhaps 5 or 10 years left as a fund manger. His previous strategies whilst successful in the long term perhaps would not have given him the instant hit he required to get the big payoff before he retired. So he took a punt.

When I was trading, any bonus payment awarded would be paid out in thkirds over three years and subject to 100% clawback including already paid. This was to ensure I could not make inflated profits on an instrument which would disappear just as quickly.




Edited by pschlute on Saturday 9th November 20:37
I will suggest that over the last ten years more amateur investors have been drawn into investing in the stock market in order to obtain a reasonable return on their savings, either that or a couple of buy to let properties.
Then you have the additional fact that he was heavily promoted by platforms like HL a platform that many amateur investors would have used.
He would have known the above.
Rightly or wrongly , naively one might say, on his excellent past record those amateur investors ploughed their savings into his companies without realising that his stratergies had completely altered.
One might say unlucky, they should have done their homework.
If ,as you infer, he " took a punt to ensure a big payoff before he retired " this could be construed as a very cynical and selfish strategy .
He was gambling, with other people's money entrusted to him on his past record.
One can understand that amateur investors might not have understood the implications and problems that might arise from his change of stratergy but what about the managers of large financial institutions and pension funds.
Investing in small business not listed on the public stock exchange that were illiquid when people wanted their money out.
I suppose I should tie my comment in with an AM slant by cynically suggesting that by obtaining a high price at the IPO the original investors in the company were able to receive their own very good pay day.
As I did not invest in either Woodford or AM my comments are purely academic and I'm sure that both Woodford's investment stratergies and the AM IPO were conducted in a completely proper manner and for the best interests of their investors and AM.
However if my cynical comment regarding the AM float is without foundation I ask who would have profited most by the initial IPO share price and why more money was not put aside for the heavy investment required for the future well being of the company ?


Edited by avinalarf on Sunday 10th November 11:48

avinalarf

6,438 posts

141 months

Sunday 10th November 2019
quotequote all
Jon39 said:

Hopefully a good subtle joke Steven, otherwise commiserations.

A most peculiar situation. Mr Woodford was with Invesco for 25 years and during that time he followed a simple proven investment strategy, promoted by Warren Buffett and which I also have used for 30 years. Majority of holdings in very large non-cyclical worldwide businesses, paying good (hopefully) increasing dividends, and retaining those same holdings for long periods. With that strict criteria, it meant having no involvement with the dot com bubble, and in the 2008-09 crash the non-cyclicals helped by having smaller declines than average.

Presumably the customers of his new firm assumed he would continue in the same way. I did not follow what was going on closely, but it now seems that he completely changed his investment strategy and bought into tiny businesses. Having succeeded for 25 years, why change to gambling with risky bets on young small firms?

It was perhaps akin to the dot com bubble, which he was proud to have understood and avoided. You could have then bought into 100 fledgling tech companies, and if just one of them was a Google or Amazon, it didn't matter that 99 went bust, but what a gamble, because you would have been more likely to have missed the lucky one.
It was a tongue in cheek comment Jon and I didn't invest in Mr Woodford.
From what I've read your brief analysis of his strategy is as I understand it to be, albeit there were other problems.
Of course if his new strategy had proven correct he would have been hailed a hero and he would now be Lord Woodford and possibly advising Mr. Corbyn.


Ken Figenus

5,678 posts

116 months

Sunday 10th November 2019
quotequote all
avinalarf said:
However if my cynical comment regarding the AM float is without foundation I ask who would have profited most by the initial IPO share price and why more money was not put aside for the heavy investment required for the future well being of the company ?
I have to agree Steven. Hundreds of millions were made and the company itself not benefiting from a penny of that at a time of gigantic investment in its future with the 7 new models - hence now having to borrow for survival at 12% confused. Your cynicism is well placed I fear.

Jon - I'll hold off positive emotional supportive buying thing for a bit!

hornbaek

3,670 posts

234 months

Sunday 10th November 2019
quotequote all
What happened with Neil Woodford can be explained by the simple fact that he started to believe too much in himself. I think there some parallels to a certain Mr Palmer.

cardigankid

8,849 posts

211 months

Sunday 10th November 2019
quotequote all
avinalarf said:
However ....... I ask who would have profited most by the initial IPO share price and why more money was not put aside for the heavy investment required for the future well being of the company ?
This, 100%. And why was the CEO so richly rewarded when the company was being starved of the capital it needs? Maybe because his job was to package it for sale not to make it successful. It’s going down, there’s no question about it. No credible level of success for the DBX for which we have been waiting for years could recoup the sort of money AM needs. And can the DBX storm a market which already has the Bentley Bentayga, Lamborghini Urus, Porsche Cayenne not to mention the next Range Rover, which is, yawn, “going to take on Rolls Royce”. It’s boys against men.

Roll on the prepack sale to MB.

JohnG1

3,462 posts

204 months

Monday 11th November 2019
quotequote all
hornbaek said:
What happened with Neil Woodford can be explained by the simple fact that he started to believe too much in himself. I think there some parallels to a certain Mr Palmer.
Spot on re: Woodford.

AP: jury still out. The owners pre-IPO got what they wanted. The joys of information asymmetry and private/public markets...

Jon39

Original Poster:

12,782 posts

142 months

Monday 11th November 2019
quotequote all

JohnG1 said:
The owners pre-IPO got what they wanted.

I am not so sure about that.

Perhaps on the first day of trading they got what they wanted. The owners certainly look very pleased, as the stood on the Stock Exchange balcony.

How might they feel about it now though, because we must remember, they were only able to sell a small part of their existing holdings ? I think Investindustrial's remaining holding has lost about £1,000,000,000 (on paper) value since flotation. That surely must be of concern to the investors in InvestIndustrial.






JohnG1

3,462 posts

204 months

Monday 11th November 2019
quotequote all
Jon39 said:

JohnG1 said:
The owners pre-IPO got what they wanted.

I am not so sure about that.

Perhaps on the first day of trading they got what they wanted. The owners certainly look very pleased, as the stood on the Stock Exchange balcony.

How might they feel about it now though, because we must remember, they were only able to sell a small part of their existing holdings ? I think Investindustrial's remaining holding has lost about £1,000,000,000 (on paper) value since flotation. That surely must be of concern to the investors in InvestIndustrial.
What did they pay for the holding? And how much had they extracted from the firm prior to IPO...



Jon39

Original Poster:

12,782 posts

142 months

Monday 11th November 2019
quotequote all

JohnG1 said:
What did they pay for the holding? And how much had they extracted from the firm prior to IPO...

You will have to help me here JohnG1.

2007 - The Company was bought from Ford for £480m, by a consortium including Investment Dar.
( Close to peak production then and profitable, so perhaps it was a very fair price, compared to the 2018 flotation value of £4,300m. )

2012 - InvestIndustrial bought 37 1\2% of AML from Investnent Dar. I don't think the price was disclosed.
They also invested £150m as a capital increase, but did that involve preference shares ? If so, they were converted to an ordinary shareholding at IPO.

As for taking money out of the Company, I don't know.


JohnG1

3,462 posts

204 months

Monday 11th November 2019
quotequote all
Jon39 said:

JohnG1 said:
What did they pay for the holding? And how much had they extracted from the firm prior to IPO...

You will have to help me here JohnG1.

2007 - The Company was bought from Ford for £480m, by a consortium including Investment Dar.
( Close to peak production then and profitable, so perhaps it was a very fair price, compared to the 2018 flotation value of £4,300m. )

2012 - InvestIndustrial bought 37 1\2% of AML from Investnent Dar. I don't think the price was disclosed.
They also invested £150m as a capital increase, but did that involve preference shares ? If so, they were converted to an ordinary shareholding at IPO.

As for taking money out of the Company, I don't know.
Well, Ford sold off an asset for £480m. That would have been nowhere near true value, Ford sale was pretty much a firesale to allow FoMoCo of Detroit to cut debt and avoid a government bail-out.

investIndustrial paid €190m via a capital increase. That's on Bloomberg, so should be accurate. At that stage an enterprise value of €940m was stated.

So, looks like the shareholders got paid out nicely...



Jon39

Original Poster:

12,782 posts

142 months

Monday 11th November 2019
quotequote all

JohnG1 said:
Jon39 said:

JohnG1 said:
What did they pay for the holding? And how much had they extracted from the firm prior to IPO...

You will have to help me here JohnG1.

2007 - The Company was bought from Ford for £480m, by a consortium including Investment Dar.
( Close to peak production then and profitable, so perhaps it was a very fair price, compared to the 2018 flotation value of £4,300m. )

2012 - InvestIndustrial bought 37 1\2% of AML from Investnent Dar. I don't think the price was disclosed.
They also invested £150m as a capital increase, but did that involve preference shares ? If so, they were converted to an ordinary shareholding at IPO.

As for taking money out of the Company, I don't know.
Well, Ford sold off an asset for £480m. That would have been nowhere near true value, Ford sale was pretty much a firesale to allow FoMoCo of Detroit to cut debt and avoid a government bail-out.

investIndustrial paid €190m via a capital increase. That's on Bloomberg, so should be accurate. At that stage an enterprise value of €940m was stated.

So, looks like the shareholders got paid out nicely...

But 37.5% of the enterprise value you (Bloomberg) state is €352.5m, not €190m.

Possibly (not sure though) €352.5m was the amount paid to Investment Dar for the 37.5% stake in AML ordinary shares,
and an additional €190m (£150m) was paid to AML for preference shares, representing the capital increase.

Wonder why Bloomberg are using Euros.
Anyway as you say, a big difference between purchase cost and value at IPO.