Woodford Concerns

Sailtheworld

bowlhead99 wrote: »

Unfortunately it didn't end in a positive result.

Quite, the result was somewhat sub-optimal.

Still WPCT up by 25% today which I'm sure will lead to it appearing on an irony free best buy table in the Daily Mail.

iglad

Sailtheworld wrote: »

Quite, the result was somewhat sub-optimal.

Still WPCT up by 25% today which I'm sure will lead to it appearing on an irony free best buy table in the Daily Mail.

No it'll be there share tip at the weekend!!

bowlhead99

Sailtheworld wrote: »

Still WPCT up by 25% today which I'm sure will lead to it appearing on an irony free best buy table in the Daily Mail.

I see Motley Fool UK are straight in there with
"Time to buy Woodford (WPCT) after 30% share price surge?"

I won't spoil the insightful commentary for you but they conclude:

If you really want exposure to the kind of unquoted assets that WPCT specialises in, now could be a very good time to get on board. But it’s not a strategy for me.

A Growth Gem
Research into unloved sectors can often unearth fantastic growth opportunities to help boost your wealth – and one of Fool UK’s contributors believes they’ve identified one such winner, which could be a bona-fide bargain at recent levels!

To find out the name of this company, and to get the full research report absolutely free of charge, click here now.

What! Hold the phones, it turns out the clickbait headline was only to tease you towards getting an absolutely free report for something else, which will tease you towards getting an absolutely not free report for something else!

Such uncommon behaviour from that site...

Brian65

Brian65 wrote: »

Up 27%.
Can't see why - It was already known someone else would be taking it over
So whats new?

No Answers?
Alan Brierley, an analyst at Investec, cautioned that despite the euphoric reaction, “we see no quick fix here”. He added “we expect to see more gremlins before any unicorns, while a high level of retail investors is likely to contribute to high levels of share price volatility”.

bowlhead99

Brian65 wrote: »

Up 27%.
Can't see why - It was already known someone else would be taking it over
So whats new

No Answers?”

They said they intended to run it as a going concern with a new and not unreasonable fee structure. An alternative approach would have been to say as others on this thread have implied: none of these assets have any real value, no point continuing, let's just dump the lot and try to get 10p for it as we wind up forever.

If you hope the assets are worth 50p, but don't know if the board really have any credible plans to bring someone in to run it and fear they may get dumped for 10p, perhaps the price gets down to 30p as was the case on Wednesday.

When it's then announced that there was a large asset manager with experience of public listed and private assets who is going to take it over and not plan to quickly dump everything for 10p, the share price will probably bounce upwards.

The Investec guy is right that there is no quick fix. And there is still a large overhang of supply from WEIF as a forced seller needing to dump tens of millions of stock, which it won't want to dump at 50% NAV discount so could be a protracted process. So, nothing is 'fixed' yet. But share prices don't exclusively move based on a company achieving an end goal. They move on sentiment, and getting heads of terms with a new manager was the first milestone needed before progress could be made.

Of course, just because a manager is willing to be appointed doesn't mean their game plan won't change when they get their feet under the table and start engaging with the portfolio businesses and lender. For Schroders to have been successful, there will have been other potential management groups who were less optimistic and unwilling to propose the same strategy or work for the same level of fees, who did not get the gig because they weren't willing to bid as competitively for it, or bid at all.

Brian65

Thanks for the reply.

bowlhead99 wrote: »

For Schroeders to have been successful, there will have been other potential management groups who were less optimistic.

Rather like the lucrative job of selling a house tends to go to the Estate Agent who dreams up the highest valuation.

Sailtheworld

Brian65 wrote: »

No Answers?
Alan Brierley, an analyst at Investec, cautioned that despite the euphoric reaction, “we see no quick fix here”. He added “we expect to see more gremlins before any unicorns, while a high level of retail investors is likely to contribute to high levels of share price volatility”.

Any Woodford investor visiting this thread or reading the Daily Mail would have been regaled with stories of just what a rotten person Woodford was - all those fees and all those rubbish stock picks. May as well sell now because you'll only get tuppence later.

Maybe now the retail investors have predictably bought high and sold low there's some money to be made.

Still quite a daily movement though - maybe some new news that hasn't found its way into the public domain yet?

MK62

As we don't even know who else applied (or indeed if any other manager did), we can only speculate on the reasons Schroders were selected as the management company......personally, I think it had to be an established name with a long history, for investor confidence reasons. The share jump would seem to indicate that investor confidence, at least for now, has perked up a bit.......I suppose only time will tell whether that confidence is justified or not.

talexuser

Reports say Schroders now get an annual management fee of 1% for Patient Capital, which in itself does not seem too controversial, even though Woodford charged nothing so far based on his poor performance (based on todays value they get 3.5million a year or £10,000 a day).

However they also get 15% of profits once the price is more than 77p a share (with the latest NAV at 63p, if you believe it) which I assume is lower than Woodford's original £1.15 limit? At first I thought what a cheek, but I suppose it is a poisoned chalice, and any success means more for investors.

Depends just how easy the job turns out to be with these types of performance fees. Reward for failure anyone?

masonic

Who would begrudge them those fees if they could turn it around from here and achieve a share price of 77p? I'm sure many are just looking for an opportunity to sell without incurring such a massive loss as they would now.