Woodford Concerns

arnoldy

From the Hargreaves Landsdown Website:
"Dealing in the Woodford Equity Income Fund has been suspended for up to 28 days"


Many, many, articles in Times this morning saying that actually it could be up to Christmas.


Who is right? Is everyone being honest and straight about the situation?

dividendhero

arnoldy wrote: »

From the Hargreaves Landsdown Website:
"Dealing in the Woodford Equity Income Fund has been suspended for up to 28 days"


Many, many, articles in Times this morning saying that actually it could be up to Christmas.


Who is right? Is everyone being honest and straight about the situation?

If I were an investor in Woodford, gating till Christmas will be far better than 28 days. 28 days is a very short time to sell unquoted assets and the resulting prices will be very low - he'd be lucky to get half price. Assuming the unquoted exposure is 20%, the hit on the fund will be around 10%

arnoldy

dividendhero wrote: »

If I were an investor in Woodford, gating till Christmas will be far better than 28 days. 28 days is a very short time to sell unquoted assets and the resulting prices will be very low - he'd be lucky to get half price. Assuming the unquoted exposure is 20%, the hit on the fund will be around 10%

Yes you are right but doesn't that mean big trouble for the HL Fund of Funds? Some of them were 15% + invested in Woodford. If after all the shenanigans people have had enough and sell out of the HL Fund of Funds between now and Christmas the Woodford (untradeable) element could rise to 30,40, 50%??


Which is well over the 10% rule of the Regulators. After being caught in a deep sleep the regulators could surely not allow this to impact yet more average Joes in the street?


Enough is enough, many of us have lost money because of what been going on.

MK62

arnoldy wrote: »

From the Hargreaves Landsdown Website:
"Dealing in the Woodford Equity Income Fund has been suspended for up to 28 days"


Many, many, articles in Times this morning saying that actually it could be up to Christmas.


Who is right? Is everyone being honest and straight about the situation?

At this moment, I doubt even WIM or Link know how long the suspension will last overall. It's initially for 28 days, at which point they must make a further announcement about whether to reopen, or suspend for a further 28 days....and so on.

I suspect the Times are speculating here (as Nocto posted above), but personally I expect the suspension will last longer than the first 28 days....how long I don't know though. Mr Woodford is going to have to build up a sizeable cash position (by selling current fund assets) to service a possible exit stampede when the fund does eventually reopen (or else he will find himself having to suspend again).....and he is going to have to do that while protecting the interests of his trapped investors, (as far as possible anyway).
So perhaps there'll be no "firesale" of those assets, and it might well take a while to position the fund for reopening.....

It's also currently unknown whether the fund will reopen with any redemption conditions/restrictions/fees.....

Uxb1

The other possibility is to find a corporate buyer for the unquoted securities who is able to take a punt/long term view and purchase the lot en-bloc.
Then liquidate the fund totally returning the resulting net proceeds to investors.

Johnnyboy11

Maybe it will reopen after 28 days, but with a 'Market Adjustment', which would be varied real-time to discourage too many redemptions happening at once?

Retired_Minky

AnotherJoe wrote: »

This gets messier and dirtier by the hour. Those interconnected share deals looked dodgy to me when i saw them originally but being bought at full price makes it much worse. Is that not illegal?



And I'm staggered no one has called him out publicly on Industrial Heat. They have no product and cannot have one because, to quote Scotty "ye canna break the laws of physics" and that's what this product would have to do. That he bought into this, beggars belief. Its Theranos all over again.

Thanks. You sent me down a rabbit hole with your mention of Theranos.

Just read an excellent article on it

https://www.vanityfair.com/news/2016/09/elizabeth-holmes-theranos-exclusive

Also downloading the podcast the dropout and have also added out for blood in Silicon Valley to my watch later play list on YouTube.

All because of your post!

dividendhero

Uxb1 wrote: »

The other possibility is to find a corporate buyer for the unquoted securities who is able to take a punt/long term view and purchase the lot en-bloc.
.

Like Hargreaves Lansdown maybe? , "Woodford has an excellent long term record" and all that...

Wonder if they'll put their money where their mouth is

Brian65

Uxb1 wrote: »

The other possibility is to find a corporate buyer for the unquoted securities who is able to take a punt/long term view and purchase the lot en-bloc.

I'm sure someone would buy it if the price is low enough.

Nocto

arnoldy wrote: »

From the Hargreaves Landsdown Website:
"Dealing in the Woodford Equity Income Fund has been suspended for up to 28 days"


Many, many, articles in Times this morning saying that actually it could be up to Christmas.


Who is right? Is everyone being honest and straight about the situation?

I doubt that even Neil Woodford knows how long the suspension will last at the moment, as it'll all depend on how quickly he can sell the unlisted investments, reposition the portfolio, and prepare for the inevitable redemptions once the fund is open.

For his business to survive then the shorter the suspension the better, but for the fund longer may be necessary to limit the damage.