Woodford Concerns

londoninvestor

Moe_The_Bartender wrote: »

And Woody sold £1m of his shares in WPCT three weeks ago without disclosing it to the board. That’s a real vote of confidence.

"To meet personal financial obligations."

He really has no property equity that he can remortgage?

AnotherJoe

ColdIron wrote: »

The pain continues

• Neil Woodford's flagship Woodford Equity Income fund is likely to remain suspended until early December, administrator Link Fund Solutions has said.

https://citywire.co.uk/funds-insider/news/woodford-fund-freeze-extended-to-december/a1254274

Pah. Its going to be wound up. They have no alternative.

iglad

AnotherJoe wrote: »

Pah. Its going to be wound up. They have no alternative.

No it will not be wound up, they'll appoint another company to run the fund.

masonic

iglad wrote: »

No it will not be wound up, they'll appoint another company to run the fund.

How will it make economic sense to continue to run the fund when everyone has sold out of it?

Moe_The_Bartender

An orderly wind down is the only logical outcome. The Woodford brand is toxic and even if he were to dispose of all his questionable investments and invest exclusively in blue chips, there will still be a rush for the door if and when it reopens. Better to liquidate everything and return the proceeds to investors.

Brian65

As WPCT NAV gets written down its leverage increases. As it does when Woodford makes the cash calls he has committed to. Must be close to its 20% leverage ceiling agreed with its lenders?

AnotherJoe

iglad wrote: »

No it will not be wound up, they'll appoint another company to run the fund.

That won't help, it's still a pile of poo whoever is holding it and enough would still want to sell out as soon as they could that the liquidity problem would be back where it was (because much of the illiquid* stuff is fundamentally unsellable at any price), and so it would need to be gated again. Someone used the phrase "death spiral" elsewhere.
Ps and as said, as the fund size decreases it gets more expensive to run, plus when it consists of only ordinary FTSE shares (if they wrote the junk off and sold the rest at any price) and is run by someone no one has ever heard of, there's no reason to hold it over dozens of other similar funds that are cheaper to run and so will have better performance. Yet more power to the death spiral. This fund needs to be taken round the back of the woodshed, and it will be.

* it's not just "normal" illiquid assets like property, that can be sold, and do have value, but takes time. It's unsellable because it's worthless.

itwasntme001

Woodford and his funds are finished. It will be liquidated to salvage whatever they can. Any guesses what the final recovery will be assuming par when the fund froze? 50%?

bowlhead99

itwasntme001 wrote: »

Woodford and his funds are finished. It will be liquidated to salvage whatever they can. Any guesses what the final recovery will be assuming par when the fund froze? 50%?

It's currently about three or four percent below the level it was at when gated. If you assume 20% of the remaining NAV is unlisted/illiquid and dumped for £100 total in a disorderly fire sale over the next six months (which some would say is pessimistic but AnotherJoe would say is optimistic), you are left with 75%+.

The way that would turn into only 50% is if there is a massive negative market event causing the the remaining 75% of value to lose a third of its value and he is a forced seller at that market low because people don't want to wait on his sinking ship for a recovery.

dividendhero

itwasntme001 wrote: »

Woodford and his funds are finished. It will be liquidated to salvage whatever they can. Any guesses what the final recovery will be assuming par when the fund froze? 50%?

As I understand it, Woodford is selling unlisted [STRIKE]junk[/STRIKE] unloved shares and buying ftse 100. That implies Woodford believe the fund has a future