What’s your big gamble? (Volume 2)

[Adam B]

I guess you’re right

The factoring company does the reverse - debit stock credit cash, and then recognised the sale

[GliderRider]

If you are in Powerhouse Energy (PHE) which rocketed up on the 31st, what do you anticipate is going to happen tomorrow, and are you planning on doing anything to mitigate a possibly substantial drop?

[bigbaddom]

Did PHE rocket? I see -5%

[CaptainSlow]

Adam B said:

I guess you’re right

The factoring company does the reverse - debit stock credit cash, and then recognised the sale

The factoring company will be the Special Purpose Vehicle ie a company set up for the transaction. They wont recognise a sale beyond the interest or fees they charge the original client. They will debit Financing Receivables credit debt and or equity.

[anonymous-user]

CaptainSlow said:

Adam B said:

I assume it is booked like any other sale, you sell to 3rd party for say 80% of normal price.

I think the above confirms you can remove the value of the stock and add cash/ reduce AP on agreement of the factoring contract. Just a guess though as RNS speaks in riddles

It isnt a sale so cant be booked as such.

Bow to your superior knowledge, I’m no accountant. Syme claim to do: “Balance sheet derecognition under IFRS” which lead me to believe it was more than simply cash but also revenue. If the stock is no longer recognised on the balance sheet then I’d assumed it was recognised as revenue instead as it had been “sold” and I had assumed the last RNS showed two of the big four had agreed with that. It’d be interesting to know what the two have actually agreed to as the RNS didn’t say so who knows?

Still many uncertainties with Syme hence I never recommend it to anyone as it’s a big risk.... but I find it exciting !!

[Jefferson Steelflex]

GliderRider said:

If you are in Powerhouse Energy (PHE) which rocketed up on the 31st, what do you anticipate is going to happen tomorrow, and are you planning on doing anything to mitigate a possibly substantial drop?

PHE dropped a little on 31st, but overall they are well up and i think this will continue. I was in PHE for over two years and triple-bagged in July when it was 3.2p and clearly i wish i’d stayed in. At the time i felt they had no project pipeline to support further rises, and that is still true today but it hasn’t stopped the sentiment around green shares propping them up far higher.

If they dropped back to 7p I will get back in, I think 2021 is going to be the year for green shares such as PHE, EQT and a few others.

[CaptainSlow]

MikeStroud said:

Bow to your superior knowledge, I’m no accountant. Syme claim to do: “Balance sheet derecognition under IFRS” which lead me to believe it was more than simply cash but also revenue. If the stock is no longer recognised on the balance sheet then I’d assumed it was recognised as revenue instead as it had been “sold” and I had assumed the last RNS showed two of the big four had agreed with that. It’d be interesting to know what the two have actually agreed to as the RNS didn’t say so who knows?

Still many uncertainties with Syme hence I never recommend it to anyone as it’s a big risk.... but I find it exciting !!

I'm not always correct and am always learning so happy to be told otherwise. I'm assuming the treatment is to derecognise the stock....stock and cash are both assets on the balance sheet so the stock balance would go down and the cash balance would go up.....total assets would stay the same...fees withstanding. This will screw up normal ratio analysis though.


I dont especially like this treatment though.

[Adam B]

CaptainSlow said:

The factoring company will be the Special Purpose Vehicle ie a company set up for the transaction. They wont recognise a sale beyond the interest or fees they charge the original client. They will debit Financing Receivables credit debt and or equity.

Seems counter-intuitive that stock is sold to a customer yet no one records revenue other than an interest rate in the SPV, and 1% to SYME, shame SYME don’t ever explain it in any detail (at least I couldn’t find it on their website).

Assuming the factory company might do a few of these a month once it gets set up and SPV each time will be a bit of a pain. Is that a requirement?

[CaptainSlow]

Adam B said:

Seems counter-intuitive that stock is sold to a customer yet no one records revenue other than an interest rate in the SPV, and 1% to SYME, shame SYME don’t ever explain it in any detail (at least I couldn’t find it on their website).

Assuming the factory company might do a few of these a month once it gets set up and SPV each time will be a bit of a pain. Is that a requirement?

The client will record the revenue when the stock is sold to a real customer.

The financing SPV is not a real customer. Even if it were to be treated as a sale, it would be a contingent sale and youd need to book a provision for returns, as the spv would always return the stock the provision would offset the sale value anyway.

As I say I could be wrong.

[Adam B]

CaptainSlow said:

The client will record the revenue when the stock is sold to a real customer.

The financing SPV is not a real customer. Even if it were to be treated as a sale, it would be a contingent sale and youd need to book a provision for returns, as the spv would always return the stock the provision would offset the sale value anyway.

As I say I could be wrong.

That makes sense, thanks

[500 Miles]

CaptainSlow said:

Adam B said:

Seems counter-intuitive that stock is sold to a customer yet no one records revenue other than an interest rate in the SPV, and 1% to SYME, shame SYME don’t ever explain it in any detail (at least I couldn’t find it on their website).

Assuming the factory company might do a few of these a month once it gets set up and SPV each time will be a bit of a pain. Is that a requirement?

The client will record the revenue when the stock is sold to a real customer.

The financing SPV is not a real customer. Even if it were to be treated as a sale, it would be a contingent sale and youd need to book a provision for returns, as the spv would always return the stock the provision would offset the sale value anyway.

As I say I could be wrong.

I think you're right Cptn - Recognising revenue before a client receives the products is a good way to get yourself in trouble.

[I Love Cake]

I've been looking through my notes from my deals in 2020, seeing where I took some huge hits and reminiscing about the time I was £2700 up on SNG.

Only really good move I've made is getting out of PMO as it began its decline, apart from that it's a financial bloodbath-

Sold GGP at 11p a share as it had dipped and I panicked.

Bought Amigo then it dived, losing a fair amount.

Pulled some money from SNG when I was still up, to top up SKIN the morning of THAT presentation.

Was still in SNG the morning the first vaccine was announced. (I have a screenshot report from Citywire saying SNG could be generating £2-3BN by year end 2020. That went well) FU SNG!!!

Going forward I will no longer be panic buying / selling, or trying to get into quick rises which may not happen, I have added green stocks to my portfolio and made it as diverse as possible.

Now holding-
GGP (Good growth?)
EAU (Largest holding by far, payday or diveday coming soon)
FCEL (More green)
PHE (Green and my sidekick to EQT)
EQT (The more I look into them, the more I like this share)
BOO (Strong book, shame about the headlines, results on the 14th, fingers crossed)
XPENG (Considering selling if it rises)
BEEM (EV network, sold for profit in a hope it would dive, it didn't so got back in again, still rising, touch wood)
RMS (Cripes!)
SYME (Might get some soon, in it to win it but completely baffled by the model, even with the explanation above!)

Here's to 2021 being a good one for us all, it this wonderful hamlet of the sometimes awful internet.

Did someone say cake?

Edited by I Love Cake on Sunday 3rd January 21:37

[I Love Cake]

Anyone here in ECR Minerals? Looks promising, company report is certainly interesting and drilling begins this year.

[Meeten-5dulx]

I Love Cake said:

Now holding-
GGP (Good growth?)
EAU (Largest holding by far, payday or diveday coming soon)
FCEL (More green)
PHE (Green and my sidekick to EQT)
EQT (The more I look into them, the more I like this share)
BOO (Strong book, shame about the headlines, results on the 14th, fingers crossed)
XPENG (Considering selling if it rises)
BEEM (EV network, sold for profit in a hope it would dive, it didn't so got back in again, still rising, touch wood)
RMS (Cripes!)
SYME (Might get some soon, in it to win it but completely baffled by the model, even with the explanation above!)

Here's to 2021 being a good one for us all, it this wonderful hamlet of the sometimes awful internet.

Did someone say cake?

Edited by I Love Cake on Sunday 3rd January 21:37

Like many here I have a few that you listed with EQT and SYME showing the most potential IMHO.

Boohoo for the long term
Ibstock for a long hold
SSE as a safe and steady, and but exposure to green ecomony.
Boohoo for whn the youth are able to go out again and get shopping.
Costain for infrastructure growth
Purple p ricks as I had them at a higher price and added some more. If house sales continue, then I think this type of company will benefit form a younger generation either buying or encouraging parents to use the service, and reducing EA fees.
EUA as I bought them near the high and don't want to take a bath in them....
Amigo, and see above.
Rolls Royce for the spread bet account as they have a typical channel they move in.

I'm going to record the price of holdings now (not just original purchase price) and try and see what has moved on a more regular basis.

I'm not giving up on stocks with potential to rise on news, fomo is strong!

[g4ry13]

First trade of 2021. Long on FTSE.

[vulture1]

g4ry13 said:

First trade of 2021. Long on FTSE.

I recon that will drop a fair chunk for Monday but by the end of the year you will be right.

[g4ry13]

vulture1 said:

g4ry13 said:

First trade of 2021. Long on FTSE.

I recon that will drop a fair chunk for Monday but by the end of the year you will be right.

This isn't a trade for the year. The intention is to take profit in the next day or so.

6555 or 6623 as a target for the trade, i'll decide once I see the open in the morning.

[OscarJ]

Will be interesting what happens with NIO. January 9th is “NIO Day” and will unveil they new saloon amongst other tech announcements. December they sold over 7000 cars also which was a record month and took them close to 44,000 cars for the year. On the flip side of that Tesla just announced their pricing for Model Y in China (about £38k ish) and the Model 3 reduced to about £28k ish so some strong market actions from Tesla.

Edited by OscarJ on Monday 4th January 05:55

[Benbay001]

The start of investing 2021.

Id be happy for a repeat of last year but without the actual virus.

A nice big crash early in the year dropping everything accross the board and then a rapid rise back to previous levels.



GL All

ETA: FTSE 100 futures are 0.5% up.

[Meeten-5dulx]

It just gets better....

http://newsfile.refinitiv.com/getnewsfile/v1/story...

(EQT loan news)