Diligent Boardbooks IPO

[Lorne Ranger]

Operationally speaking, is anyone else concerned about the only comment on the iTunes store (byQeertyyiophffhhhb)?: https://itunes.apple.com/nz/app/diligent-boardbooks/id412771395?mt=8
Customer Reviews


Good idea, buggy execution



by Qeertyyiophffhhhb
A good product overall but consistently freezes during use & the navigation can be very buggy at times, jumping multiple pages etc, which makes it hard to use in a board meeting

Review wont do the app any favors, but not a very important marketplace for this product, and review contains no date or follow up. I doubt DIL are losing sleep over it.

Has anyone on this forum actually USED the DIL products? (Mobius excluded of course). I've been using Xero since they began (three years prior to my accountant!) so know they are great, but wouldnt mind passing the time with some user experiences of DIL.

[Lorne Ranger]

Dear Lord

I know we haven't spoken for a while, not since the night before Arsenal were in the Champions League final I think, but Im hoping you are listening this time. Some of us believe that tomorrow is the day, the long awaited day when DIL will finally release their restatement. I gather you're not much of a fan of things business, more of a plague and mountains kind of guy, but I want you to know that people here, on your Earth, holding DIL, we're suffering Lord. Each day is a little worse than the day before. Porsches are becoming Corollas, we're being patient Lord, and were getting meeker by the day. So I ask, go on, make it a good day for DIL. I'm not asking for a miracle, just to make the restatement as expected. Use a bit of that old can-do magic to make it happen for us Lord. Give the auditors the nudge, flick, whatever it takes, you know how, of course you do. If you need an extra 24hours to make it happen on Friday then I understand. We've waited this long, what's another 86,400 seconds.
Make it so, and I promise I'll do better. I'll listen to Hoop and the others trying to warn us with charts. I'll stop checking my stock app on the Greenlane roundabout. Ill diversify back into Ryman and the Airport if you can just do this one thing Lord.

Do we have a deal?

Amen

Your humble servant

L Ranger

[bonne vie]

Lorne Ranger - hope the prayer does it - love it.
My sister n law uses Diligent Boards, albeit not a huge company but says it is brilliant. You seem to want to compare to Xero - I thought xero was an accounting package - unless it now has an add on for Board papers which Diligent is.

[robbo24]

nothing today. tomorrow it is. keep praying everyone!

DIL release notices at weird and wonderful times during the day though...

[Mobius]

The iPad app "review" is a troll. Let me explain.

The iPad app is 100% rock solid, is in no way "buggy", and does not behave in the manner described. The only possible slowness which could ever be experienced is if the product is used in a way which is not recommended. Here's why: the iPad is designed to "sync" the board materials to the device over broadband. Once the books are synced (and you can select which books to sync), they are all stored locally, so there is ZERO delay in viewing material.

However, if you are a lazy and/or stupid director, you wouldn't read the materials before the meeting, and you would turn up, un-prepared, without the material synced. Now, usually there is just one Wifi hotspot available in a meeting room, and if you have 7 lazy/stupid directors, who either all start syncing when the meeting starts, then the Wifi can easily get swamped (shared bandwidth, on a lower quality signal) and performance can suffer.

But please note that Boardbooks, when used as recommended, will NEVER have a performance issue, unless there is something wrong with the iPad itself, or a wifi signal strength can't support high throughputs. The syncing technology is extremely solid, and the data throughput on good connections is extremely high.

Take it from me, if the iPad app were anything other than awesome, the company couldn't support the product, it's as simple as that.

As with most things, you can make a brilliant app, and try to make it foolproof - but there will always be some small number of stupid users who couldn't find their ass with their hands. And for those people, they have a variety of 24/7 phone numbers, all around the world, where they can call for assistance, where some very well trained, highly capable, well-spoken, very patient, extremely polite people are standing by to offer Concierge Level assistance.

It's THIS level of service which to my knowledge, no other company on Earth offers, which is DIL's greatest strength. The person who posted the "review" seems to have some special inability to dial 10 digits, or to follow their training. Possibly they were not trained - as a small number of clients refuse that option - something Diligent prefers they did not do - for obvious reasons.

I can honestly say that the iPad app is a fantastic bit of software, on a brilliant (but flawed) device (Let's not go there - I despise Apple's intentionally crippled devices. I'm an Android man!) which operates in a totally intuitive way once the books have been synced. Using the iPad app is a genuine pleasure, with the ability to use a highlighter (of any colour) in a free-hand way, attach typed sticky notes, write by hand directly on the pages themselves, and you can bookmark a page by simply folding the corner over. Pages turn by flicking pages left and right.

At the meeting, a user simply clicks the "notes" button, and a list of all pages containing notes, and detailing what kind of note is there, allows users to very simply raise their issues, or ask their questions based on their notes. If you simply thumb your way through the book, the notes are automatically displayed on each page as it is opened.

All this, of course, relies on the directors being diligent (NPI), and syncing the books ahead of time, reading thoroughly, and making diligent notes on the materials. It will not surprise you at all, to learn that there are extremely diligent directors, and their are directors who do not prepare for a single minute ahead of a meeting. Diligent supports both types equally, but they only get panicked calls from one kind of director, and I will let you work out which kind that might be. I suggest the "review" might be written by the same kind of director.

It is also worth me adding that the percentage of lazy directors is low, and that almost universally, directors are extremely "nice" people, who never get upset, even when things are not going well, are very patient, well spoken and believe it's best to let people do their jobs, rather than go off the deep end. I was always very impressed with how directors handled issues, and let the DIL team help them out. They were always a delight to work with!

-----------
How many escape pods are there? "NONE, SIR!" You counted them? "TWICE, SIR!"

[robbo24]

It is also worth me adding that the percentage of lazy directors is low

Doesn't iOS have Push notices... "Your Boardbook has been updated, tap to sync." ?

[robbo24]

so, we need to be the patient and understanding director at this point in time in regards to the announcement. we have done our pre-meeting homework and are "well positioned" ;)

Come on Moosie, winky faces won't fix the destruction of the perceived credibility DIL once had...

[robbo24]

no it won't, but does that affect the bottom line if the company? nope, companies are still signing up in droves. only the company can fix that credibility and it is being done right now.

I think the credibility of the company can certainly affect the bottom line. Would you obtain the services of Snakk, given your recent questions surrounding the credibility of that company?

Sure, you could say DIL took advice and services from their auditors, accountants - whoever - but at the end of the day the buck rests with the management and the directors. The same people big customers rely on to provide a good service and the same people shareholders rely on to make good decisions for the company.

If customers don't have faith in DIL then all the winky faces on the internet won't change that...

[JohnnyTheHorse]

http://www.youtube.com/watch?v=dH3i4QG3tvo

You will also see a nice big Diligent advertisement plastered across the top of the Bankdirector.com (people who released the video) website. Nice targeted advertising.

[tosspot]

I think its becoming very clear that tomorrow they will announce an extension and the painful sideshow will continue. Its a very low chance of something that's been ongoing for month just happens to be complete the same day of the deadline

[Dej]

I think its becoming very clear that tomorrow they will announce an extension and the painful sideshow will continue. Its a very low chance of something that's been ongoing for month just happens to be complete the same day of the deadline

Unless an all-nighter is pulled at the auditors!

[robbo24]

Unless an all-nighter is pulled at the auditors!

What's the best case scenario? "Our previous years were actually really bad, for the last FY we are really good"?

Then, surely, they start to work out the tax liability for each FY and start to sort it out?

[CJ]

I think its becoming very clear that tomorrow they will announce an extension and the painful sideshow will continue. Its a very low chance of something that's been ongoing for month just happens to be complete the same day of the deadline


Unless an all-nighter is pulled at the auditors!More likely they knew the deadline so timetabled board meetings around that. They are probably all sitting in a boardroom now syncing their iPads and wondering why they didn't sync it at home when they wouldn't be on a shared connection. The techies shaking their head in disbelief wondering why the suits are ruining their great company.

[tosspot]

Tosspot - can you tell me how it is very clear they will announce an extension? I haven't picked up on that myself - I don't see anywhere any information that hints, let alone says its very clear that will happen. Would genuinely appreciate the link to such information.
key words in my post "I Think"

[robbo24]

Damaged agreed, but not destroyed, Robbo. I think you are overegging the pudding here, as the saying goes.

I agree, it is damaged not destroyed.

I just have some qualms about the view that the restatement announcement is going to restore confidence and create a big lift in the SP (regardless of the effect on the inherent value of the company).

I like Moosie and his optimism but surely - USA comparisons or not - the situation isn't cured by restatement alone.

[Halebop]

I like DILs fundamentals but can't see a pressing need to run in just yet.

There is a support/resist range between around $4.50 and $4.75. The market is bouncing off the top of that today but would expect it to more seriously test $4.50 than $5.00.

Holders would not want $4.50 to fail because the next stops looks more like $3.75 to $4.00.

That announcement needs to be clear and good...

Someone mentioned valuation models before. Here is mine, subject to the impacts of restatements:

4761

Key Assumptions:
97% Retention Rate
US$25m New Business Per Annum
Expenses will drop as % of revenues
R&D will move from being expensed to being amortised
Discount Rate on DCF 10% (not risk free rate - shares aren't risk free and share markets over time deliver 9-12%pa so why benchmark lower?)

[Halebop]

cheers halebop. so why is the market still going in the opposite direction when we all know where it should be right now?

I think you know already Moosie?

Doubt, governance, restatements, too many mistakes = negative sentiment

[Halebop]

so think irrationally right now, but hope everyone turns rational when we get our news then?

Well the news might not be good but either way the scenario that has played out has certainly injected uncertainty.

My job is to try and make money from it. Holding through the negative sentiment has not paid.

[Snow Leopard]

Thanks for revealing your analysis to the world Halebop.

I do not disagree with your figures and only wish that my spreadsheets looked so tidy and presentable.

Best Wishes
Paper Tiger

[MAC]

You’re brave Halebob posting FA on a thread full of enthusiastic newbie traders.

Looks very good!

I’m using a slightly higher terminal value and a very slightly higher revenue stream (single product) giving me $7.80. Although, I’ve not yet allowed for any possible impacts from Deloitte’s audit, I’m valuing facts over rumours for now, but will readjust if necessary.

I’m looking for an incremental and steady climb back to fundamental valuations over the next 5-6 months or so as the market regains confidence.

Of course a comprehensive announcement and some details about a new product may kick things along sooner.

[Mobius]

Brighton Early, you seem a little confused. And your 1-liner doesn't do you or Boardbooks justice, nor is at accurate.

"Upgrades" are not bug fixes. Upgrades are new functionality, or performance enhancements, for the most part. UpDATES are often bug fixes, however. It's well worth stressing the point here that NO software is bug free. Not even the most critical systems on Earth. The concept of a bugfree enterprise level software system is itself ludicrous. Boardbooks is not without bugs - but to characterise it as "buggy" is an out and out lie, or at very best, grossly misleading.

The software sees very extensive automated and manual testing by a highly qualified team. It is VERY seldom a bug affecting actual director usage of Boardbooks makes it into the wild. I can only remember one or two such instances in my decade at Diligent. In a few instances, some extremely rare use-cases might result in some unexpected behaviour, but again, and I stress this: nothing which prevents a competent user from successfully completing their work.

Ignorant users may sometimes classify something which is not a bug, as a bug. But being unaware of how something works does not constitute a bug, it's ignorance.

Let me reassure you, the number of calls Diligent takes about genuine bugs is essentially zero, compared to the total volume of calls. What are the other calls about? A good portion of calls are from administrators, as they are at the coal face of the product, but the vast majority of calls are from directors who have forgotten their passwords. I'm sure no one has trouble accepting this as true.

In summary: Boardbooks is a great product, no matter what platform you're on - and if you DO have ANY kind of problem, you can trust that the Concierge Level Support Staff will go 2 extra miles to resolve it. That's what Diligent and Boardbooks is all about.

------------
How many escape pods are there? "NONE, SIR!" You counted them? "TWICE, SIR!"

[robbo24]

Thanks for revealing your analysis to the world Halebop.

I do not disagree with your figures and only wish that my spreadsheets looked so tidy and presentable.

Best Wishes
Paper Tiger

If the Tig likes it then it's got to be good!

[Lorne Ranger]

Someone mentioned valuation models before. Here is mine, subject to the impacts of restatements:

Thanks for the figures. $7.05 - Do you mean that as a current valuation (or almost current based on restatement as expected), or when? Your figures are over several years so just checking exactly what you mean and not assuming.

[Snow Leopard]

If the Tig likes it then it's got to be good!

I valued this just over two months ago (http://www.sharetrader.co.nz/showthread.php?5408-Diligent-Boardbooks-IPO&p=413312&viewfull=1#post413312) but which is 1700 posts back.

Fortunately I did not buy any then!

Best Wishes
Paper Tiger

[tosspot]

Sure - I appreciate that. Hence why it would be great if you could outline your thoughts as to why it is so clear? What makes you think it is very clear? Because there isn't anything I've seen which suggests they will outline an extension. As a DIL holder I'm genuinely keen to know if this is the case or not.
exactly what I had in my post Its a very low chance of something that's been ongoing for month just happens to be complete the same day of the deadline.
IMO they would not leave something to the very last day if it was finished and it doesnt seem feasible that they finish on the same day as a dead for perspectively a long time event

[JohnnyTheHorse]

If they have sorted everything and they release all the amended reports, I would probably expect it to be released after the market closes. There will be a fair bit of information to go through I suspect, so it wouldn't exactly be fair to release it whilst the market is still open.

[Xerof]

Can some one point me in the direction of where this deadline is stated as being tomorrow? Just checking ta

[JohnnyTheHorse]

Can some one point me in the direction of where this deadline is stated as being tomorrow? Just checking ta

The deadline is today for their half year result. NZX rule 10.4.1 states that it must be released no later than 60 days after the end of the financial period.

[winner69]

Be a disaster if they didn't get a waiver and the non production of half year accounts resulted in a suspension

[Snow Leopard]

Can some one point me in the direction of where this deadline is stated as being tomorrow? Just checking ta

Listing Rules (https://nzx.com/files/static/cms-documents/NZSX:NZDX%20Listing%20Rules%205%20October%202012.p df) Rule 10.4.1 (b)

Best Wishes
Paper Tiger

[Xerof]

Roger that JtH, and PT, thanks.

[Xerof]

Be a disaster if they didn't get a waiver and the non production of half year accounts resulted in a suspension

current longs may see that as a blessing :p

[robbo24]

Listing Rules (https://nzx.com/files/static/cms-documents/NZSX:NZDX%20Listing%20Rules%205%20October%202012.p df) Rule 10.4.1 (b)

Best Wishes
Paper Tiger

Paper Tiger, the Listing Rules do not expressly define "days".

However the term "business days" is defined.

The rules say 60 "days" after the end of the financial year.

The only mention of the word "days" (other than in the term "business days") in the Listing Rules is at 10.4.1.

Are we to take this to mean 60 days in the plain meaning of the word days, or does it mean working days? Or, is it a typo and does it actually mean "business days"?

[baller18]

If it is today and they don't make it, then we are in for another wild ride to the down down dirty dirty south!!!

[robbo24]

If it is today and they don't make it, then we are in for another wild ride to the down down dirty dirty south!!!

In some places in the Listing Rules the term "Business Days" with capitalized first letters is used and in some places "business days" is used without capitalization. The whole use of the words "Business Days,", "Days", "days" and "business days" is a total grey area due to the incompetence of the listing rules. Any lateness (and resulting allegations of a breach) is clearly due to the ambiguity of the rules.

[Snow Leopard]

Paper Tiger, the Listing Rules do not expressly define "days".

However the term "business days" is defined.

The rules say 60 "days" after the end of the financial year.

The only mention of the word "days" (other than in the term "business days") in the Listing Rules is at 10.4.1.

Are we to take this to mean 60 days in the plain meaning of the word days, or does it mean working days? Or, is it a typo and does it actually mean "business days"?

Let us first consider the transition between the two hyperfine levels of the ground state of the cesium 133 atom and the resulting radiation*

It is just days, consecutive days.

But in the days when I did stuff for other people we sometimes had long discussions about what a "day" was for instance:

Australia has numerous time zones;
Some of those time zones do daylight savings, (23, 24 & 25 hour days);
Some utility assets have their own "operating day";
Does a day begin at 00:00 and end immediately before 24:00 or does it start immediately after 00:00 and end at 24:00 ?

Believe me this was important!

Best Wishes
Paper Tiger

*used to define a second (http://physics.nist.gov/cuu/Units/current.html)

[JohnnyTheHorse]

I'm almost certain that it means "days". I have it on good authority that an announcement will definitely be made.

[robbo24]

It is just days, consecutive days.

Do you give more weight to a Business Day in capital letters or a business day without capital letters?

Does the express definition of "Business Day" exclude "business day"?

[Dej]

I'm almost certain that it means "days". I have it on good authority that an announcement will definitely be made.

What sort of announcement though? :sleep:

[pierre]

What sort of announcement though? :sleep:

Probably an announcement along these lines:

"Due to a lack of diligence in our accounting department all we know is we're sitting on a bundle of cash but we're still not sure where it came from, whether it's ours or not and what we're supposed to do with it. Our auditors are still trying to unravel this unholy mess and we'd really appreciate it if we could have another month or two to find out how all this happened."

[MAC]

Pierre, you are truely a gem.

[robbo24]

Man, the sarcasm and silliness sure has come out today. Love it! :t_up:

If I had to bet on it I'd say pierre is right :)

[MAC]

Thank you black knat for making that call.

Let’s hope that DIL provide us with at least a forecast completion date for the audit. It would be hard to believe that Deloitte have not yet had adequate time to scope their work and to put a professional schedule to it by now.

[pierre]

If I had to bet on it I'd say pierre is right :)

I sincerely hope I'm wrong!

I'm a holder - but like many on here, a pretty frustrated one - and wondering how much longer we'll have to wait for this outfit to get their act together. Let's hope too that the fees from Deloitte don't drain their bank balance too much either. The decline in the SP has already taken the gloss off my net worth, and of many others too I'm sure.

[Xerof]

To be honest, I'm not fussed how long it takes, as long as it's done correctly, and an accounting template is in place for ever more.

knat, your wording suggests an extension - agree? Horse, any advance on that?

[MAC]

Agree, shorter or longer, I'm not fused also, but it would show some respect to their shareholders for DIL management to advise when ?

[winner69]

ALF was always having trouble meeting deadlines as well

[pierre]

ALF was always having trouble meeting deadlines as well

Not sure if it's Alf, Fred, or Harry who's caused the problems with this lot, but whoever it was is definitely a DIL(L).

[The Rocket]

Man, the sarcasm and silliness sure has come out today. Love it! :t_up:

I had a Dream yes I had a Dream about Diligent or was it a vision. Diligent will finally release there reinstatement on Christmas Eve after the market is closed hoping no onewould notice. Mind you DIL shares will be.45 cents by then. Firstly Deloites has found Diligent errors it was the decimal point instead of having 40,000.000 in the bank they have 400,000.00 in the bank. Deloittes won’t release their findings until they are paid 1.2 million as agreed for their fees. On the brightside with Diligent shares worth .45 cents a merger is going to happen every 2 Diligent shares will be worth 1 new merger share I won’t say who the company is but it is a tech stock. The new company will be called A Diligentsnakk. There main reasons for a merger is a back door way of getting in the top 50 for the other unnamed company. All shareholders will get Christmas gifts like hankies, a noose for a moose, a frown for a clown, a porche key ring for roadrunner etc. Analyst says the merger will make the new shares worth .60 to .80 cents so they will probably be worth .20 cents never mind when they bottom they will bounce backup stay in there guys.

P.S: WILL SOMEONE PLEASE WAKE ME UP FROM THIS NIGHTMARE :confused:

[winner69]

An outfit called PLS were also often late with their reports

One was hilariously - the CFO was doing the accounts on a pc on the Isle of Man and didn't bother do any backups and they needed to recreate all the records to come up with a report ....and that didn't take as long as DIL is taking to recount stuff

[pierre]

Maybe Deloitte should call in the vote counters from Zimbabwe for some help. They seem to be pretty good at achieving a fast result - and with whatever answer you want!

[winner69]

Seems only crap companies file things late .....not quite correct cause BLS have always met the deadlines

[blakecb]

I had a Dream yes I had a Dream about Diligent or was it a vision. Diligent will finally release there reinstatement on Christmas Eve after the market is closed hoping no onewould notice. Mind you DIL shares will be.45 cents by then. Firstly Deloites has found Diligent errors it was the decimal point instead of having 40,000.000 in the bank they have 400,000.00 in the bank. Deloittes won’t release their findings until they are paid 1.2 million as agreed for their fees. On the brightside with Diligent shares worth .45 cents a merger is going to happen every 2 Diligent shares will be worth 1 new merger share I won’t say who the company is but it is a tech stock. The new company will be called A Diligentsnakk. There main reasons for a merger is a back door way of getting in the top 50 for the other unnamed company. All shareholders will get Christmas gifts like hankies, a noose for a moose, a frown for a clown, a porche key ring for roadrunner etc. Analyst says the merger will make the new shares worth .60 to .80 cents so they will probably be worth .20 cents never mind when they bottom they will bounce backup stay in there guys.

P.S: WILL SOMEONE PLEASE WAKE ME UP FROM THIS NIGHTMARE :confused:

hahahaha that is absolutely genius! Sooo many comedians on this forum....

I did email DIL today asking about when the restatement would be released (not because I am a holder, more because I was bored after all the A2 excitement died down)....but strangely I didn't receive an answer.

[winner69]

hmmmmmm me thinks DIL have had plenty of time to sort this one, if they now need an extention me thinks they did not like the result so need more time to evaluate a different accountancy practice/stratigy to achieve a different result.

If an extention is required one thing is for sure the accountancy blunder is not as simple as management have made it out to be.


I am tending to agree snapiti.

I've said, Balance has said it --- when things drag on .... and on .... and on .... it usually ends in tears

Many could be really pissed off soon and let down by those they trusted

[Lorne Ranger]

hmmmmmm me thinks DIL have had plenty of time to sort this one, if they now need an extention me thinks they did not like the result so need more time to evaluate a different accountancy practice/stratigy to achieve a different result.

If an extention is required one thing is for sure the accountancy blunder is not as simple as management have made it out to be.

That's one theory, but pretty speculative. Mind you, just about all we have at the moment is. I have the company fundamentals printed out and pinned to the wall behind my computer, to remind me at least that is real.

[Halebop]

Thanks for the figures. $7.05 - Do you mean that as a current valuation (or almost current based on restatement as expected), or when? Your figures are over several years so just checking exactly what you mean and not assuming.

A good question LR.

The valuation is a DCF variant - it is projecting a current value on future cashflow assumptions. So if you paid $7.05 you'd expect to receive the discount rate of 10% as a return assuming DIL exactly met the assumptions in the model (which is unlikely but I need to make assumptions to reach a valuation). This is also subject to change if the restatement is meaningfully different. Although the restatement might result in significant historical movement, I don't think it will mean much for future value because it's mostly about timing (revenue recognition) and new business rates have been steady meaning that recognition should have a fairly even future impact even if historical impacts are significant (It might move 2011 to loss for instance).

Wiki DCF:
https://en.wikipedia.org/wiki/Discounted_cash_flow_valuation

If you can read VBA or are famililar with adding VBA functions to a spreadsheet, here is a DCF Code suitable for Excel:


Public Function DCF(dbl_EPS As Double, dbl_GROWTH As Double, lng_YEARS As Long, _
dbl_DISCOUNT As Double, dbl_TERMINATION As Double)

'Dimensions
Dim dbl_PRICE As Double
Dim a As Long
Dim dbl_CALC_VALUE As Double
Dim dbl_CALC_TERM As Double
Dim dbl_TERM_EPS As Double

'Calculate annual EPS and compound by Growth (dbl_GROWTH) over the X years (lng_YEARS)
'Also discount the Growth EPS by the discount factor (dbl_DISCOUNT)
For a = 1 To lng_YEARS
dbl_CALC_VALUE = dbl_CALC_VALUE + (dbl_EPS * ((1 + dbl_GROWTH) ^ a)) / ((1 + dbl_DISCOUNT) ^ a)
Next a

'Calculate the Termination EPS at end of the growth years period (lng_YEARS + 1)
dbl_TERM_EPS = (dbl_EPS * ((1 + dbl_GROWTH) ^ lng_YEARS)) * (1 + dbl_TERMINATION)
'Discount the termination EPS by the dbl_DISCOUNT factor
dbl_CALC_TERM = dbl_TERM_EPS / (dbl_DISCOUNT - dbl_TERMINATION) / (1 + dbl_DISCOUNT) ^ lng_YEARS
'Add the Value calcuation comonants (Growth EPS period) + the termination EPS to determine value
dbl_PRICE = dbl_CALC_VALUE + dbl_CALC_TERM
'Set value back to function name (Output to cell)
DCF = dbl_PRICE

End Function

[Halebop]

Thanks for revealing your analysis to the world Halebop.

I do not disagree with your figures and only wish that my spreadsheets looked so tidy and presentable.

Best Wishes
Paper Tiger

Aww shucks :t_up:

[Snow Leopard]

Aww shucks :t_up:

If I had known that you use Hungarian notation for variable names I would not have been so nice :angry:.

Best Wishes
Paper Tiger

[Roadrunner]

FOR SALE: My house,my Porsche and my 3 legged,one-eared dog answering to the name of Lucky :)

[Halebop]

If I had known that you use Hungarian notation for variable names I would not have been so nice :angry:.


Like many religious people I'm a bit slow so the hungarian approach helps remind my addled brain what I was thinking in plain english when reviewing many days or years later. Apologies for the angst. :ohmy:

[robbo24]

FOR SALE: My house,my Porsche and my 3 legged,one-eared dog answering to the name of Lucky :)

Swap you some DIL shares for the dog... I could make more money from internet memes

[nextbigthing]

I like DILs fundamentals but can't see a pressing need to run in just yet.

There is a support/resist range between around $4.50 and $4.75. The market is bouncing off the top of that today but would expect it to more seriously test $4.50 than $5.00.

Holders would not want $4.50 to fail because the next stops looks more like $3.75 to $4.00.

That announcement needs to be clear and good...

Someone mentioned valuation models before. Here is mine, subject to the impacts of restatements:

4761

Key Assumptions:
97% Retention Rate
US$25m New Business Per Annum
Expenses will drop as % of revenues
R&D will move from being expensed to being amortised
Discount Rate on DCF 10% (not risk free rate - shares aren't risk free and share markets over time deliver 9-12%pa so why benchmark lower?)

Halebop,

Thank you for having the guts to post your quality valuation. Greatly appreciated by newer and older members no doubt.

$25 million new business p.a. does not seem unreasonable - do you have a specific way you can up with this figure though?

Cheers,

NBT

[Halebop]

Halebop,

Thank you for having the guts to post your quality valuation. Greatly appreciated by newer and older members no doubt.

$25 million new business p.a. does not seem unreasonable - do you have a specific way you can up with this figure though?

Cheers,

NBT

Hi NBT,

It's what they have acheived for 2 years so have applied no more finesse than that.

I don't have detailed or insider information on where they are going for growth (i.e. Country/region or industry niches) so it would be silly to attempt a model at a granular level. Detailed modelling is hard enough from the inside of a company so is pointless from the outside. My instinct is that they are still mining large and often listed or "famous" companies but the mid teir should prove lucrative - their sales and deployment model just needs to scale down. Having economies of scale by dominating the big end assists with this.

My reckoning on size of opportunity is perhaps as high as 90,000 organisations world wide but this requires a lighter touch at the smaller end.

[blackcap]

I hope you are not overwieght on DIL moosie, my best friend only owns RAK and is in $150k which is currently worth $22k and soon to be less.

Its a great lesson though isnt it to have something like that happen when you are young in life. Its harsh maybe but you learn fast. When I was a lot younger I was often convinced of a story and would not diversify adequately. Much to my disgust the story would be flawed, what seemed like a great business plan etc turned out to be nothing. But lessons well learnt that help you later in life.

p.s It doesnt stop you investing in "great stories".. you learn to invest a smaller proportion in more and ultimately still do very well :)

[GRIFFIN]

So what will be the outcome be if the statement is less than positive or drags on, the market is taking a fairly dim view of its situation now.

[blakecb]

I have bought enough at what I thought was fair price (and is below analysts and others on here expectations!) so I will wait until the market rights itself before making anymore buy/sell calls. When in a hole, stop digging. If it turns I have dug up a rocket, all the better :)

On a more pressing note, where is our announcement? 9:07 am is the usual call time...

Yes I too have been wondering about the missing announcement this morning. My only guess is that they will wait until the end of play so as to give the market the weekend to digest it. If it is an extension they don't want to see a mad panic this morning, as investors with frayed nerves finally give out.

[baller18]

released.... Ride to the southhh

[AndyLP]

Oh there's an announcement all right.......! Looks like they won't be reporting on 30 September either.

[Toasty]

Got in at $6.30 and bailed at $5.40. Been waiting for an opportunity to get back in and recoup but today doesn't look like the day...:(

[Mista_Trix]

Got in at $6.30 and bailed at $5.40. Been waiting for an opportunity to get back in and recoup but today doesn't look like the day...:(

Lucky you bailed, I'm kicking myself.

This company is destroying itself!!

[Roberto]

New holder here. Was hoping I'd picked the bottom (or close enough) at $4.81, but looks like at least a couple of months in the red ahead...

[winner69]

I like DILs fundamentals but can't see a pressing need to run in just yet.

There is a support/resist range between around $4.50 and $4.75. The market is bouncing off the top of that today but would expect it to more seriously test $4.50 than $5.00.

Holders would not want $4.50 to fail because the next stops looks more like $3.75 to $4.00.

That announcement needs to be clear and good...

Someone mentioned valuation models before. Here is mine, subject to the impacts of restatements:

4761

Key Assumptions:
97% Retention Rate
US$25m New Business Per Annum
Expenses will drop as % of revenues
R&D will move from being expensed to being amortised
Discount Rate on DCF 10% (not risk free rate - shares aren't risk free and share markets over time deliver 9-12%pa so why benchmark lower?)

Hey halebop, I ran you numbers through my long hand DCF model and hey presto it came to 705

I think your growth assumptions are way to bullish but that's another debate

Why I do long hand versions of a DCF is to see where the value is and when it will be made

Under your assumptions over 70% of the value is embedded in the terminal value (post 2017). Is DIL going to keep on innovating forever to sustain what it will build up over the next 5 years and then continuing to grow?

A term growth rate of 0% gives 554 .....some might also say that as technology moves on and DIL ha a limited life and will start to shrink after 5 years , under that scenario valuation with a 20% pa decline comes to something like 320

Anyway that's what models are for ..to assess what something is worth. But sentiment comes in and rationality goes out the window and punters like moosie thinks it must be worth heaps more 672 and 10 bucks is fair. Every man and gal to their own eh

Good work though

All I know is that I would pay 30 times current cash flow at this stage of DILs evolution ....but punters bidding it up so irrational levels was good for me. That's where charts win hands down on FA

[baller18]

Getting out? and buy back at a cheaper price?

[bonne vie]

Oh well - park in bottom draw for a few months and bury my head in the sand by taking it off my Direct Broking portfolio summary so I don't have a daily reminder. Keeping faith now that the basic financial structure will not change dramatically with reinstatement and it is emotion depressing the SP. Give it a couple quarters after reinstatement and emotion will fade. Fingers crossed.

[iceman]

This is very disappointing and particularly the fact that they give no firm dates to look forward to to complete this process. But it is of some comfort that they reiterate what they have stated on several occasions : " As previously advised, the need to restate historical financial statements does not affect total revenues ultimately earned or to be earned, the amount or timing of cash received or to be received from individual customer agreements. Income earned in a period may however move to a different period. If that occurs, this would impact on the net income and tax payable in that period and subsequent periods."

We just have to hope this turns out to be true and that the restatements don't create large and overdue tax liabilities !

[stoploss]

Don't like this bit "

These


statements are subject to risks and uncertainties, including the risk that


additional information may become available in preparing and reauditing the


financial statements and may require the Diligent to make additional


corrections, the time and effort required to complete the restatement of the


financial statements, the ramifications of the Diligent's potential inability


to timely file periodic and other reports with the Securities and Exchange


Commission, and the risk of litigation or governmental investigations or


proceedings relating to these matters. In addition, as disclosed in our prior


filings, our Special Committee investigation identified a number of instances


in which we were not, or may not have been, in compliance with applicable New


Zealand and US regulatory obligations and such instances may expose us to


potential regulatory actions and/or contingent liabilities; certain of our


past stock issuances and stock option grants may expose us to potential


contingent liabilities, including potential rescission rights;"

[winner69]

So no waiver .....just we won't penalise you unless you are really bad and don't front up before Xmas. And they seemed to have pissed off the fMA as well

This is more than disappointing .....this is shocking stuff .....and prob Weldon did some quick talking to mitigate the damage.

The Wild West NZ is eh

I still think something stinks ....this has to be worse than most think

[Mista_Trix]

Jesus, the depth charts turned into a game of who can go the lowest, clearly a few people wanting to get out.
... hmmmm, which way to go, cut and run - hope for a win later, or stay and endure the pain ...

[Roberto]

Oh well - park in bottom draw for a few months and bury my head in the sand by taking it off my Direct Broking portfolio summary so I don't have a daily reminder. Keeping faith now that the basic financial structure will not change dramatically with reinstatement and it is emotion depressing the SP. Give it a couple quarters after reinstatement and emotion will fade. Fingers crossed.

I think I'll go with this sentiment rather than selling out today. Story hasn't changed, and all that...

[baller18]

Will get in, once everything turns around, no point riding the downtrend train any longer.
Buy it back at a discount to the current SP regardless...

[bonne vie]

Stoploss I think most of this wording is that they need to cover or seen to be covering all eventualities for the regulatory authorities. More serious for us shareholders but very much like all the warning signs we see at entrances to building sites or those big orange cones around a hole 6 inches deep.

[Toasty]

And to think I sold some XRO shares to buy in to this one....Ahhhh!

You are not alone!

[iceman]

Jesus, the depth charts turned into a game of who can go the lowest, clearly a few people wanting to get out.
... hmmmm, which way to go, cut and run - hope for a win later, or stay and endure the pain ...

Yep, to be expected I suppose after such a disappointing treatment from the company. Will be " interesting" to see where SP settles today !

[Hoop]

Next TA support at 450..lets see if that holds

[baller18]

5.2% down already! Damn wanted to get out at $4.7 lol!

[Twinklefingers]

Stupid question time...

How do you people who keep saying sell now and buy again in a few months justify this to your accountant or the IRD? Are you all traders and therefore paying tax on everything? Or is there something I'm missing.

My understanding from my accountant was if I buy a stock then sell it only to buy back in again later I'm basically setting myself up for the IRD to view my entire portfolio as a trading account instead of investment. Clearly DIL is in freefall and won't recover at least until October but the tax ramifications of selling out and buying backin don't seem worth it even if we are forced to lose money in the short term. Am I wrong about this and the IRD won't mind?

[Toasty]

Wow $4.55 up already. I've seen rocks fall slower...

[Everwood]

And to think I sold some XRO shares to buy in to this one....Ahhhh!

I did exactly the same thing. I sold just under 6% of my Xero holding, but I still believe diligent has a good future. I wish I keep my promise not to sell any of my Xero shares.

[MAC]

Any share buy back proposition must be looking good now for the next few months, although the DIL board are perhaps a little preoccupied with other matters.

At these levels one wonders also if DIL will increasingly become the focus of takeover speculation. It’s hard to assess if prospective parties would be deterred or encouraged given present circumstances ?

[goldfish]

Shouldnt the management be coming out with statements to shareholders stating exactly what is going on, and at least trying to assure there shareholders about what is happening? I have emailed them twice asking questions a while back but heard nothing. They obviously dont give a damn. I hope they treat there clients a LOT better then there shareholders.

[baller18]

risk or not, major downtrend

[Roberto]

Stupid question time...

How do you people who keep saying sell now and buy again in a few months justify this to your accountant or the IRD? Are you all traders and therefore paying tax on everything? Or is there something I'm missing.

My understanding from my accountant was if I buy a stock then sell it only to buy back in again later I'm basically setting myself up for the IRD to view my entire portfolio as a trading account instead of investment. Clearly DIL is in freefall and won't recover at least until October but the tax ramifications of selling out and buying backin don't seem worth it even if we are forced to lose money in the short term. Am I wrong about this and the IRD won't mind?

As a newbie I'd also be interested in hearing people's responses to this.

[Hoop]

Next TA support at 450..lets see if that holds

Hmmmm....broken down to 445
Theres a historic intraday low of 445 maybe thats is in play atm otherwise.. there's a gap at 4.30 which often work as a support mechanism.... but the next major support is 4.02

[blackcap]

dont know where you get your figures from Hoop but according to my screen its already down to $4.20 ;)

deadcat bounce time maybe....

[bonne vie]

Shouldnt the management be coming out with statements to shareholders stating exactly what is going on, and at least trying to assure there shareholders about what is happening? I have emailed them twice asking questions a while back but heard nothing. They obviously dont give a damn. I hope they treat there clients a LOT better then there shareholders.

I think it is a bit harsh to say they don't give a damn. Anything Diligent says at the moment is going to effect the SP and if they give incorrect information then based on a job half done then they set themselves up for further issues with the Regulatory bodies. So to reply to any individual questions with other than what is available to the general public then this potentially further exacerbates the issues via Chinese whispers and inside trading challenges.

[CJ]

Stupid question time...

How do you people who keep saying sell now and buy again in a few months justify this to your accountant or the IRD? Are you all traders and therefore paying tax on everything? Or is there something I'm missing.

My understanding from my accountant was if I buy a stock then sell it only to buy back in again later I'm basically setting myself up for the IRD to view my entire portfolio as a trading account instead of investment. Clearly DIL is in freefall and won't recover at least until October but the tax ramifications of selling out and buying backin don't seem worth it even if we are forced to lose money in the short term. Am I wrong about this and the IRD won't mind?


As a newbie I'd also be interested in hearing people's responses to this.The intention is at the time of purchase, not at the time of sale. So as long as when you purchased, you did not acquire with the purpose of resale, you are fine.

There is no 'tainting' with shares. Each purchase stands on its own. However, the test is an objective test so if you have a pattern of trading, it is likely all will be caught unless you can prove otherwise. it is often recommended you have 2 accounts if you want to trade and hold long term. There are other threads that discuss this in more detail - have a search.

[bonne vie]

As a newbie I'd also be interested in hearing people's responses to this.

Have a look under the general forums where this has been discussed a lot at various times - I had a quick look
to try to find the exact one to point you to but did not locate it but it prob is under the Newbies Forum. Cheers

[Hoop]

dont know where you get your figures from Hoop but according to my screen its already down to $4.20 ;)

deadcat bounce time maybe....

My post took 2 minutes to load ...lots of talking ....
Yes I watching out for a possible entry with the dead cat in mind

[Mista_Trix]

I think it is a bit harsh to say they don't give a damn. Anything Diligent says at the moment is going to effect the SP and if they give incorrect information then based on a job half done then they set themselves up for further issues with the Regulatory bodies. So to reply to any individual questions with other than what is available to the general public then this potentially further exacerbates the issues via Chinese whispers and inside trading challenges.

While I agree, having spent a bit of time in Comms, a quick interview with one of the major papers/media firms showing the personal side of the story (none of the details just the sentiment), "anyone can understanding adhering to accounting principles accross multiple countries is difficult ... we're acting in the best interests of our shareholders ... to keep them informed in a timely manor ... and reslove all issues to ensure these types of errors don't happen in the future" blah blah blah. Smiles and a photo.

But they've done nothing, that's where my frustration stems from, they could have helped the SP hold a lot with a comms strategy, which would have helped the market remain more rational around the issues, instead its gone into free-fall ... again. This suggests to me they're not as mature a company and board as they're making out to be.

[swillisam]

The intention is at the time of purchase, not at the time of sale. So as long as when you purchased, you did not acquire with the purpose of resale, you are fine.

There is no 'tainting' with shares. Each purchase stands on its own. However, the test is an objective test so if you have a pattern of trading, it is likely all will be caught unless you can prove otherwise. it is often recommended you have 2 accounts if you want to trade and hold long term. There are other threads that discuss this in more detail - have a search.

Additionally the onus of proof is on the taxpayer therefore if Inland Revenue have a sniff at your portfolio and they think you are actively trading with the intention to sell then you need to show your intention is not that (if that is the case). Having two accounts like CJ said helps to distinguish between your long term holds (generally capital gains are not taxed) and short term trading (capital gains are taxed).

[winner69]

FCF about 20 cents divided by sparks 6% gives a value of 333

What a load of rubbish these valuation techniques are ....can't even give a decent number for DIL

Shucks ... 333 sooner than later eh

That Mr Buffett sure is clever

Spooky eh

[Dilbert]

While its not pretty, I'm still in. I think the sentiment is overly negative, for a growing cash generating company - nothing has changed there.

[winner69]

Getting close to 50% off its peak .......that means 100% increase to get back there

Won't happen me thinks .....ever

Milford are gurus ....taking advantage of an irrational market

[bonne vie]

Mista Trix - yes I can see what you are saying and I assume the media (or perhaps NZX)will be looking for more from the Board after this latest announcement and the impact on the SP. Surely with an NZX announcement like today - the PR department must have also prepared some sort of comment without the gooblykook to cover off the obvious questions . If not then you may not have been too harsh after all - an interesting day ahead.

[MAC]

What a fantastic opportunity Moosie, $5 to $6 was looking like 'very good' value before the 6th August delay announcement. Any entry point between $4 and $5 is just looking like 'exceptional' value now. Aren’t traders wonderful creating such opportunities for us all ?

[blakecb]

What a fantastic opportunity Moosie, $5 to $6 was looking like 'very good' value before the 6th August delay announcement. Any entry point between $4 and $5 is just looking like 'exceptional' value now. Aren’t traders wonderful creating such opportunities for us all ?

Mac the traders were out a long, long time ago. It is the FAers who have held on for dear life, some on the encouragement/instruction of ST members, that are rightfully exiting stage left now.

[Mista_Trix]

Makes me glad to be appropriately diversified.

[MAC]

Ha, fair comment blakecb, there are good and bad traders and investors both.

[winner69]

Easy to be pessimistic in a down market winner. Bet you didn't think they would come up around 3600% off their all time low either did ya?



I not pessimistic .... just a realist

So on historical performance we should expect DIL to be $167 some time in the future

[bonne vie]

Just had a look on Diligent's website and there is no press release and even given the time difference between US/NZ - do some of the longer term ST members here find that odd given the obvious impact/questions the announcement would have.

[JohnnyTheHorse]

It is well outside the lower BB. Looks like it could be bouncing back somewhat now.

[stoploss]

I not pessimistic .... just a realist

So on historical performance we should expect DIL to be $167 some time in the future

Guys lets keep it above the belt so to speak .A lot of lessons learnt on this thread, maybe more wealth destruction than the Rakon thread.However I see this as a place to try and help everyone out . So lets just keep to the salient issues.

[Mista_Trix]

Just had a look on Diligent's website and there is no press release and even given the time difference between US/NZ - do some of the longer term ST members here find that odd given the obvious impact/questions the announcement would have.

As i said earlier, this is what worries me. A solid board with an understanding of the issues would mitigate them to the best of their abilities, doing nothing (other than - we need more time ... sorry we need even more time ... ooop, and again, a little more time) says a lot about their ability to manage chaos and have an understanding of all of the issues they're dealing with - internal and external.

[Balance]

Mac the traders were out a long, long time ago. It is the FAers who have held on for dear life, some on the encouragement/instruction of ST members, that are rightfully exiting stage left now.

Nope - traders are the ones who are panicking out.

If you follow the company, much has changed from a market sentiment but not a lot has changed from a business point of view.

Look at Yahoo or any of the techy companies as sentiment swing from one extreme to the other on them - be alert and that's where the real money is made.

[Balance]

If you want some inspiration NOT to panic, have a look at GPG - trashed talked down to 43c and today it's 55c and rising.

http://www.sharetrader.co.nz/showthread.php?1501-Guinness-Peat-Group-Plc-(GPG)/page219&highlight=gpg

28% gain in 3 months - whoever listens to the doomsayers without doing their homework, loses.

[Xerof]

It is well outside the lower BB. Looks like it could be bouncing back somewhat now.

candy from babies ..... This is a live example of the day trade I mentioned about 1500 posts ago....lol

[False Profit]

I see DIL as being one of those items in my portfolio that has, NOW, become a longer term investment. I'm new to share trading but think most of us were caught out by the drop in price and I have no intention of selling. I bought DIL shares within my budget - "I can afford this much without going to the pawnbroker if it all turns to custard". I like the company and what they have accomplished so far.

I look forward to DIL doing the business as I think we know they can. Might take a few months, years whatever.

[blobbles]

That really is quite a shocking set of announcements from the company. Basically they are saying "our entire financial position we stated before could be wrong". Quite a scary admission, just one small step from finding out they were cooking the books. For a company involved in the governance sector, this is a shocker.

Even as an FA'er, if they can't get their book keeping right, it tells me management have either poor oversight, are way too naive/inexperienced or worst of all complicit in stating their position. None of which gives me confidence about the future. I would be out now if I owned any and cautiously back in once they proved their books were on the straight and narrow... Probably not on the back of anything unaudited by an outside accounting firm.

Really it sounds like Deloitte got a look at their books and found a stack of problems, not just the one they thought they had.

[Balance]

I see DIL as being one of those items in my portfolio that has, NOW, become a longer term investment. I'm new to share trading but think most of us were caught out by the drop in price and I have no intention of selling. I bought DIL shares within my budget - "I can afford this much without going to the pawnbroker if it all turns to custard". I like the company and what they have accomplished so far.

I look forward to DIL doing the business as I think we know they can. Might take a few months, years whatever.

Right approach to take, FP.

Look at those who pissed in their pants and bailed out at $4.35 this morning - they could have waited an hour and sold at $4.60 or above.

Now we are selling those who bought off those with wet undies selling out for a quick trade at $4.60 or thereabouts.

[stoploss]

Right approach to take, FP.

Look at those who pissed in their pants and bailed out at $4.35 this morning - they could have waited an hour and sold at $4.60 or above.

Now we are selling those who bought off those with wet undies selling out for a quick trade at $4.60 or thereabouts.






Trades











Market Currency


Settlement Currency














Code



Date
Action



Qty


Price/Yld


Value


Fees


Settlement


Settlement


Due Date
Status












DIL.NZX (https://www.anzshareandbondtrading.co.nz/dynamic/quote.aspx?qqsc=DIL&qqe=NZSE)



30/08/2013
BUY



2,000


435


8,700.00


29.50


8,729.50


8,729.50 NZD


04/09/2013


TRADED











DIL.NZX (https://www.anzshareandbondtrading.co.nz/dynamic/quote.aspx?qqsc=DIL&qqe=NZSE)



30/08/2013
SELL



2,000


460


9,200.00


29.50


9,170.50


9,170.50 NZD


04/09/2013


TRADED











Page 1





Balance you looking at my account !!!! ?

[Balance]

Trades











Market Currency


Settlement Currency














Code



Date
Action



Qty


Price/Yld


Value


Fees


Settlement


Settlement


Due Date
Status












DIL.NZX (https://www.anzshareandbondtrading.co.nz/dynamic/quote.aspx?qqsc=DIL&qqe=NZSE)



30/08/2013
BUY



2,000


435


8,700.00


29.50


8,729.50


8,729.50 NZD


04/09/2013


TRADED











DIL.NZX (https://www.anzshareandbondtrading.co.nz/dynamic/quote.aspx?qqsc=DIL&qqe=NZSE)



30/08/2013
SELL



2,000


460


9,200.00


29.50


9,170.50


9,170.50 NZD


04/09/2013


TRADED











Page 1





Balance you looking at my account !!!! ?

YOU are a CHAMPION!

two thumbs up ! :D :D

[Dej]

Trades









Market Currency




Settlement Currency














Code


Date


Action


Qty




Price/Yld




Value




Fees




Settlement




Settlement




Due Date


Status











DIL.NZX (https://www.anzshareandbondtrading.co.nz/dynamic/quote.aspx?qqsc=DIL&qqe=NZSE)


30/08/2013


BUY


2,000




435




8,700.00




29.50




8,729.50




8,729.50 NZD




04/09/2013




TRADED













DIL.NZX (https://www.anzshareandbondtrading.co.nz/dynamic/quote.aspx?qqsc=DIL&qqe=NZSE)


30/08/2013


SELL


2,000




460




9,200.00




29.50




9,170.50




9,170.50 NZD




04/09/2013




TRADED













Page 1




Balance you looking at my account !!!! ?

Hahaha! Good effort ! :t_up:

[stoploss]

Oh dear, the yellow liquid has come into play again. Thought HNZ would be the end of it!

Just proves that those with cajones and know their charting abilities can make some quick bucks on others fear and irrationality!

Nice little weekend play money there eh stoploss???

yea I am taking my daughter skiing ( weather permitting) that should about cover it.....

[Hoop]

Nope - traders are the ones who are panicking out.

If you follow the company, much has changed from a market sentiment but not a lot has changed from a business point of view.

Look at Yahoo or any of the techy companies as sentiment swing from one extreme to the other on them - be alert and that's where the real money is made.

Traders are everyone withinin the market......The DIL market on opening I would assume that the disciplined TA traders, together with other disciplined investor using stoploss strategies were already long gone. the rest did the panic selling this morning......Since then I assume the short termers might now be "in" playing their own game and nibbling around the edges, the Fundies who got out earlier may see this as a re=entry opportunity...so the diametrics have changed somewhat this morning ...this was a massive shakout of DIL holders.

There's been a nice bounce off the "bottom" at $4.20.....to 4.69(EDIT) as of now...

Round 2 may commence with the lunchtime crowd...their behaviour may be an enigma...

[blackcap]

Not even 1% of the shares traded... so no big deal really. That is one problem with the NZ market if you are a trader. Just not enough liquidity.

[JohnnyTheHorse]

No word from Sparky as of yet? Gee, he's either quietly accumulating more shares or he has jumped...

I must say that I'm pretty disappointed in management. This has taken far too long and they have not provided the market with any indication as to what the timeline is. Whilst this is unacceptable, I still firmly believe that the actual impact this has on the business is extremely minimal and the future is extremely bright. The re-auditing costs will however hit this years NPAT to some degree... I would be very disappointed to see management claiming record bonuses this year.

[winner69]

No word from Sparky as of yet? Gee, he's either quietly accumulating more shares or he has jumped...

I must say that I'm pretty disappointed in management. This has taken far too long and they have not provided the market with any indication as to what the timeline is. Whilst this is unacceptable, I still firmly believe that the actual impact this has on the business is extremely minimal and the future is extremely bright. The re-auditing costs will however hit this years NPAT to some degree... I would be very disappointed to see management claiming record bonuses this year.

Sparky will be reducing his exposure to DIL .... but will be keeping heaps

[Halebop]

Hey halebop, I ran you numbers through my long hand DCF model and hey presto it came to 705

I think your growth assumptions are way to bullish but that's another debate

Why I do long hand versions of a DCF is to see where the value is and when it will be made

Under your assumptions over 70% of the value is embedded in the terminal value (post 2017). Is DIL going to keep on innovating forever to sustain what it will build up over the next 5 years and then continuing to grow?

A term growth rate of 0% gives 554 .....some might also say that as technology moves on and DIL ha a limited life and will start to shrink after 5 years , under that scenario valuation with a 20% pa decline comes to something like 320

Anyway that's what models are for ..to assess what something is worth. But sentiment comes in and rationality goes out the window and punters like moosie thinks it must be worth heaps more 672 and 10 bucks is fair. Every man and gal to their own eh

Good work though

All I know is that I would pay 30 times current cash flow at this stage of DILs evolution ....but punters bidding it up so irrational levels was good for me. That's where charts win hands down on FA

Hi Winner, thanks for the feedback.

Everyone has their own logic. I don't make a call on longevity - in the end most business models fail without change but I lack the prescience to predict which ones will adapt and prosper and which ones will go bust or be acquired cheaply. So for me the termination rate is a proxy for inflation and not a proxy for longevity.

On the flipside if I thought the business had obvious longevity risks I'd probably not be spending time valuing it.

Definately agree the charts were the useful baramoter; My "bullish" view on operating performance is not supported by current share price performance!

[Mista_Trix]

Looks like we have been backfilled to $4.60. Hope more buyers are attracted now that we have some firm dates set. :)

Firm dates?!?!?
"Saaay whaaaat."

[TimmyTP]

First or second week in October for Third Quarter selected results. No later than end of October for half yearly. About as firm as you're going to get there!
Ah, so firm like my stomach after the extra pie I just had for lunch then. I thought I had missed something in the announcement too MT.

[Mista_Trix]

First or second week in October for Third Quarter selected results. No later than end of October for half yearly. About as firm as you're going to get there!

"Diligent will endeavour to provide selected operating highlights for the Company's third quarter in the first two weeks of October."

And the half yearly is no later than December, not October, only October for preliminary, which I do wonder how much it would say anyways...

[winner69]

"Diligent will endeavour to provide selected operating highlights for the Company's third quarter in the first two weeks of October."

And the half yearly is no later than December, not October, only October for preliminary, which I do wonder how much it would say anyways...

That is an awful lot of hours of work ....... auditors charging heaps and DILs own people who probably have better things to do anyway unless they ahve had to hire contractors etc.

Would think a hefty expense here eh.

[winner69]

DIL effort as good as this company's effort of a few years. They at least produced something in 3 months. A useless CFO triggered this .....maybe other similarities to DIL. ....hope not



PLS
23/12/2008
HALFYR

REL: 1740 HRS Plus SMS Holdings Limited

HALFYR: PLS: ANNOUNCEMENT TO NZX REGARDING PLUS SMS HOLDINGS LTD (PLS)

23 December 2009

Market Information
New Zealand Exchange Limited
Wellington

ANNOUNCEMENT TO NZX REGARDING PLUS SMS HOLDINGS LTD ("PLS")

On 10 October 2008 the Board of Directors of PLS announced the immediate
termination of the employment of its Chief Executive Officer and its Chief
Financial Officer due to material and fundamental breaches of their
employment duties, obligations and agreements.

Since that time the Board has been overseeing an exhaustive investigation of
the company's affairs and is currently preparing a detailed report to be
released to shareholders shortly.

At the time of the above terminations the Board took steps to secure the
company's data and IT servers, however the above investigation has revealed
that the Company did not follow normally accepted procedures for the
security, retention, and back up of company data.

All NZX reports, operating records of some companies and high level
consolidation worksheets were apparently maintained on personal computers and
not backed up to the company's server.

All attempts to recover this information have failed. The fact that the CFO
undertook his duties from a private residence on the Isle of Man has further
frustrated recovery of the company's property and information.

While operational accounting and reporting is in place to facilitate and
control the day to day operations of the group, the lack of this data has
inhibited the completion of our NZX reporting and necessitated additional
cost and delay in the reconstruction of essential information and
documentation.

That process is substantially complete but will not be finalized to allow
compliance with our reporting deadline.

The board has sought from the NZX a short extension for lodgment of the
report - the practical effect of this would be that the report would be
delivered during trading on 19 January 2008.
End CA:00174634 For:PLS Type:HALFYR Time:2008-12-23:17:41:06

[VinPetrol]

Sigh, how does a 'simple' revenue restatement turn into such a 4764.

[Whipmoney]

DIL effort as good as this company's effort of a few years. They at least produced something in 3 months. A useless CFO triggered this .....maybe other similarities to DIL. ....hope not



PLS
23/12/2008
HALFYR

REL: 1740 HRS Plus SMS Holdings Limited

HALFYR: PLS: ANNOUNCEMENT TO NZX REGARDING PLUS SMS HOLDINGS LTD (PLS)

23 December 2009

Market Information
New Zealand Exchange Limited
Wellington

ANNOUNCEMENT TO NZX REGARDING PLUS SMS HOLDINGS LTD ("PLS")

On 10 October 2008 the Board of Directors of PLS announced the immediate
termination of the employment of its Chief Executive Officer and its Chief
Financial Officer due to material and fundamental breaches of their
employment duties, obligations and agreements.

Since that time the Board has been overseeing an exhaustive investigation of
the company's affairs and is currently preparing a detailed report to be
released to shareholders shortly.

At the time of the above terminations the Board took steps to secure the
company's data and IT servers, however the above investigation has revealed
that the Company did not follow normally accepted procedures for the
security, retention, and back up of company data.

All NZX reports, operating records of some companies and high level
consolidation worksheets were apparently maintained on personal computers and
not backed up to the company's server.

All attempts to recover this information have failed. The fact that the CFO
undertook his duties from a private residence on the Isle of Man has further
frustrated recovery of the company's property and information.

While operational accounting and reporting is in place to facilitate and
control the day to day operations of the group, the lack of this data has
inhibited the completion of our NZX reporting and necessitated additional
cost and delay in the reconstruction of essential information and
documentation.

That process is substantially complete but will not be finalized to allow
compliance with our reporting deadline.

The board has sought from the NZX a short extension for lodgment of the
report - the practical effect of this would be that the report would be
delivered during trading on 19 January 2008.
End CA:00174634 (tel:00174634) For:PLS Type:HALFYR Time:2008-12-23:17:41:06

lol based on the hysteria levels around here it's near enough a good time to double down:)

[Mista_Trix]

lol based on the hysteria levels around here it's near enough a good time to double down:)

Catch the knife .... catch the knife ... catch the knife !!!

[Balance]

Catch the knife .... catch the knife ... catch the knife !!!

Trade like the expewrts do - buy at $4.35 and flick out at $4.60 - all in a few hours

[pierre]

Probably an announcement along these lines:

"Due to a lack of diligence in our accounting department all we know is we're sitting on a bundle of cash but we're still not sure where it came from, whether it's ours or not and what we're supposed to do with it. Our auditors are still trying to unravel this unholy mess and we'd really appreciate it if we could have another month or two to find out how all this happened."

I've been off the air for most of the day so have just caught up with news from the dills at DIL. Regrettably it looks as though my tongue-in-cheek forecast of last night (Post #3226) has come true - well almost anyway!

[winner69]

Some more statistics to bite into as we watch her go down:



Market Cap (intraday)5:
377.83m


Enterprise Value (30/08/2013)3:
408.00m


Trailing P/E (ttm, intraday):
58.57


Forward P/E (fye 31/12/2014)1:
28.19


PEG Ratio (5 yr expected)1:
0.92


Price/Sales (ttm):
7.94


Price/Book (mrq):
21.92


Enterprise Value/Revenue (ttm)3:
8.05


Enterprise Value/EBITDA (ttm)6:
26.33



Moosie ....ever thought those stats are the reason why the price is falling .....some outrageous multiples there

Maybe, just maybe, price does follow value (or whatever that phrase sparks uses is)

[Xerof]

Nice close, in the scheme of things

here's something to watch for Mondays close

A pin bar reversal is based on the pin bar or hammer, indicating the price action told lies today (pinocchio= pin)

DYOR and trade this at own risk

[nextbigthing]

Please Snapiti.... do be a little more careful with what you say.

Yes, there was some allegedly incompetent management...



Sparky,

How would you describe DIL's 'management' of this issue? Hardly world leading. Snapiti is fairly stating his or her view as many do.

NBT

[Halebop]

The point I was trying to make is that this was a big undertaking to restate three plus years of revenue with some technical fishhooks. It's busy enough for a company to pump out an annual return - doing three years plus as quickly as possible under the watchful eye of an auditor to ensure complete compliance is bigger than we expected - but it is not a myriad of issues as Snapiti suggested. Rather a couple of issues with lots of time needed as outlined above.

I agree.

The simple issue of revenue mis-counting will have many outputs; revenue needs to be retated, sales commissions & trailing commissions to sales people need to be recalculated and adjusted while some sales people will have left their employ and any over-payments probably need to be written off, profits need to be restated and annual accounts rebuilt with consequential impacts on tax liability accrued and paid, bonuses accrued and paid etc. Each issue discovered needs to be worked through, comprehended and approved by the board/mamagement... and the market won't forgive sales slowing down while management are distracted. Suspect this will feel more like 4 or 5 audits going on at once (both in terms of cost and distraction). Consider what a distraction 1 formal audit can be?

[Corporate]

What did I tell you guys weeks ago. The restatement of many sets of financial statements doesn't happen overnight! This thread is going to be painfully tough until October!

[Mista_Trix]

Put it this way - if you had some kind of legal trouble, and the media rung you up to ask you about it, would you mouth off to try and look good on a slightly different matter to the one at hand, or would you keep your mouth shut as much as possible, resolve the issue, then put your side of the story across?

I'm not an expert in spin or media, but I don't think the media would be particularly helpful to you if you tried that.

I totally agree with your macro points. Unfortunately I would have expected a more front footed approach to keep things stable, the fact that its lost the gains that it has, and sent shock-waves through a pool of potential future backers is quite poisonous to its own future.

Regardless, still holding, and will wait out, and accumulate when I can, but I would have expected more from the comms team.

[nextbigthing]

Put it this way - if you had some kind of legal trouble, and the media rung you up to ask you about it, would you mouth off to try and look good on a slightly different matter to the one at hand, or would you keep your mouth shut as much as possible, resolve the issue, then put your side of the story across?

I'm not an expert in spin or media, but I don't think the media would be particularly helpful to you if you tried that.

Sparky,

I'm no expert in media relations either. However surely stating just enough to keep everyone happy, including investors, would have been a good idea do you not think?

NBT

[blakecb]

yup, charts showing a nice big hammer . looking forward to next week . nice big volume as well for a support level. think we might have seen bottim (touch wood).

I've lost count as to how many times you've called the bottom moosie...? :p

Hammers are strongest when they close up rather than down, but nonetheless. Hammers in themselves need confirmation, so we'll wait for Monday....but I'm unconvinced in this case. This hammer was created by sheer panic after the announcement and the "panicing ones" ran out of steam as the day traders lined up to capitalise on the over reaction. It might just be back to the 'business as usual' downtrend on Monday. The positive is that at least they have provided something of a timeline to the market, even if that is December! There has clearly been anxiety around when things would be released/announced, and now some certainty has been provided maybe it will settle the market and even put it into a consolidate period (you never know your luck!) until October. But man oh man they better release something in those first two weeks in October.

I really feel for holders.... I lost out big time on RAK once upon a time and it is a terrible feeling. I even remember the trick of deleting it from my portfolio list. Hopefully as Sparky has said this ship will right itself in time.

[baller18]

One thing i don't understand, we have been holding and holding.....
More than likely, its going to fall, so why not sell out and buy back at a cheaper price?
Yes company has not changed, and we believe in the company, but everyone's in this game to make profits...

[winner69]

Trend theory says that trends remain intact until something different happens (a shock) that will reverse the trend. Unless something different happens the trend will continue

DIL been in a strong downtrend for 3 months now .... nothing different has come along to change that trend so it may continue. That something different might happen in October.

Extrapolate the current trend out that far and October the shareprice could be 333

Bugger that Buffett Valuation number keeps popping up again .... I wont argue with Buffett ..... all a bit spooky though

[baller18]

Trend theory says that trends remain intact until something different happens (a shock) that will reverse the trend. Unless something different happens the trend will continue

DIL been in a strong downtrend for 3 months now .... nothing different has come along to change that trend so it may continue. That something different might happen in October.

Extrapolate the current trend out that far and October the shareprice could be 333

Bugger that Buffett Valuation number keeps popping up again .... I wont argue with Buffett ..... all a bit spooky though
i used the buffet calculator a month ago and got 333 as well, and im like, it can't be, dead wrong! Look at where its heading...

[croesus]

$2. seems a bit low, I may buy at $2.40

[Amor Fati]

[QUOTE=Amor Fati;424187]Bit of bedtime reading?
http://www.boardbooks.com/corporate-governance/
See New Committee Charters as of the 10 June 2013.
Pg, 2,9,12,15,16, all in capital letters just for you Moosie!
What could this mean I wonder..... thought provoking capital letters at least.

Having and currently owning company's, it is imperitave they fix the accounting issues. Believe me they ALWAYS take longer than you would like them too, how do you think big accounting firms make money... Not by hauling A..E that is for sure.

Personally it was expected. I would have been suitably impressed if they had it all completed.

Have been holding and buying since before the get go, even buying in the single digits. Sold up a few, and going to buy again, especially if this silly panic keeps up.

More thoughts,
If Diligent was my company and I had this issue arise I would be thinking well if it has to be done how can I use it to the company's advantage?

Then thinking I might soon be considering listing on another exchange, (see earlier post re New Commitee Charters) and maybe because I need the accounts to be fixed anyway.... I might as well get them done exactly how they need to be done to make the transition easier?

Observation, isn't it amazing how even if a company is doing financially well it is not enough to dictate its worth..... Its the little old simple trader!

Question for people; If you didnt know what the share price was or is, and you were well informed on the fundamentals of the company, how would you view it for investment?

Just thoughts???

[PlatnuM195]

I thought their statement that none of this affected revenues earned or cashflows was enough of a sign that this issue is only a formality. If they said any more then wouldn't that be counted as a price sensitive announcement?

[baller18]

Yes, nothing has changed, if thats nothing has changed. I ask again, why get in if its going down, we all in this game to get profits...

[Xerof]

I mentioned capitulation earlier today.......and perhaps 'despondency' was at $4.20

IMO not far to go now...... I do note a lot of the young bulls are now bearish.....

as I said earlier, Mondays close might prove instructive....might not too, so keeping open mind till then, and extra powder dry

[bonne vie]

IMHO Summary of the events of today:
1) STC is right reinstatement of 3 years accounts is a huge complex task. DIL have one opportunity to get it right
2) No matter how great management are, they can not all be experts in all fields especially specialised field of regulatory rules. They should have been able to rely on the CFO. They have now recognised issues with CFO and acted
3) While we want DIL 's reassurance/something via a company press release, their advisors and the board itself will be very aware anything said could be misconstrued and to provide a meaningful 100% correct comment is not possible until the reinstatement has been completed

SO in the meantime we have:
1) DIL approach to timing of reinstatement - Promise the worst but deliver the best
2) ST - many posters approach - Reading only the worst into today's announcement and predicting doom and gloom

I fully understand the dilemma many of us are in but our options are:
a) If we believe in the company - hold and be an long term investor
b) If you do not believe in the company including the income/expenses and clientele disclosed over the past 3 years sell
c) Ask yourself - is worrying for months about the situation going to make any difference to the outcome of the reinstated accounts? None, zip (But the hernia/ulcers may impact on your finances). So sell if you need to to sleep at night - otherwise spend your energy on the rest of your portfolio.

DISC - Added shares at $4.80 and holding

[Amor Fati]

Bonnie Vie, Touché!

Disc - Hold

[bonne vie]

Moosie, From you posts you sound are pretty laid back - suspect horizontal in the museum dungeons at times but I thinks many young uns getting ulcers over DIL. Suspect there may be a few finding it hard to explain to their Mrs or Mr that their holiday fund is now a long time investment - having invested at the "lows".

[robbo24]

I do note a lot of the young bulls are now bearish.....

I started posting some pessimistic nonsense to see what it is like... And to see if posting my unvalidated, unreasoned expression of emotion could get others going.

My brother called me up today asking about this DIL business. I told him the story as derived from the latest announcement and he was like "oh... so it's a bargain then."

Has the product changed? Na.

My touchstone for whether this is really a problem is whether customers start leaving.

Are customers leaving? If not, stop crying on the forums.

[robbo24]

I mentioned capitulation earlier today.......and perhaps 'despondency' was at $4.20

This is an awesome diagram... Looks kind of like the cycle of addiction too.

[winner69]

I mentioned capitulation earlier today.......and perhaps 'despondency' was at $4.20

IMO not far to go now...... I do note a lot of the young bulls are now bearish.....

as I said earlier, Mondays close might prove instructive....might not too, so keeping open mind till then, and extra powder dry

Nice diagram Xerof .... maybe a timely reminder for some to hang in there

Then again there can often be many 'Points of maximum financial opportunity' as the price cycles down in a long downtrend. RAK had at least 3, if not 4, from the chart and comments from excited sharetraders

Maybe you are saying that this is not really a long term hold anymore .... but plenty to be made on the inevitable regular cycle upswings in a long term downtrend

[blakecb]

One thing i don't understand, we have been holding and holding.....
More than likely, its going to fall, so why not sell out and buy back at a cheaper price?
Yes company has not changed, and we believe in the company, but everyone's in this game to make profits...

A very good question baller18. On numerous previous posts I told people to hold off buying until the turnaround - that there is no such thing as 'cheap shares' and that to buy in then would be gambling. But I was rebuffed and called to account even as the share price continued to plummet. The ones promoting these shares were never called to account, just those who questioned the herd.

The time to buy is when it all turns around. When the restatements have shown where everything sits - then it is not gambling, but rather getting all the information available and making a wise investment decision. To all those about to challenge me on the gambling comment - ponder this - you own a company for which you have no audited accounts. Again by waiting, it will mean you miss the bottom, but at least you wont find it as a holder.

As to whether you should sell now to buy back later for less, of course it's your decision, but truth be told if I still owed these shares, I would probably wait until Monday and see if a consolidation period emerges. Consolidation periods are normally against the trend (so upwards in this case) and may give you an opportunity to get out with more $. As on a previous post, next time you purchase shares be sure to have a stoploss set - the price at which you will sell no matter what the 'story' .

A few final points - I can't really think of a more risky stock than software/tech, so bear that in mind. I work on the assumption that all companies are going bankrupt; it is just a matter of when and whether I can make money before they do (can anyone name any companies still around from 1980?). The only people who know the real 'story' are the board - no one else.

[CJ]

NASDAQ listing must be soon. Deloitte in NZ is not a LLP. If they expected to stay on ghe NZX, they would get Deloitte NZ to sign off the NZ accounts.

Happens all the time. I know Australian companies don't allow oversea firms to sign off accounts so the likes of FBU and SKC would use NZ auditors for their group accounts but need Australian auditors for their Australian subsidiaries.

[Xerof]

Maybe you are saying that this is not really a long term hold anymore .... but plenty to be made on the inevitable regular cycle upswings in a long term downtrend

DIL has only given one sell signal, in the past few years, which was telegraphed on this thread, but seemingly went un-noticed.

W69, to your first statement, no, I am not saying that, but clearly some extra risk has been exposed and priced in. Time will tell if it gets priced out again. My last few posts are just making it clear that its not all one way, and Friday may prove to be a bit of a watershed moment. But I reserve judgement until after Monday close on a daily chart.

Your second comment is also not my line of thought. Cannot say it's in a long term downtrend, but can say thats perhaps we get a s/t buy signal, which will be valid until the next s/t sell signal. Unhelpful aye?

I haven't looked at it from Elliot wave perspective, and probably won't go into any detail, to be honest. I'm already exposing myself to a crucifixion, by the hindsight harrys, if it remains custard on Monday/Tuesday

BUT, it would be nice if the move up to $8.20 was a multiyear wave 1, and we are in wave 2 now. Imagine where wave 3 would take us!

IMOO and DYOR

[jimmyco]

blakecb well said! I agree with waiting for rock bottom, and looking for a change in the trend. You might miss the initial gains, but if the audit comes out clean this should be nothing to worry about. Meanwhile it may well be another 2 months before the good news is released.

Before we get into the trader vs investor argument ... I wouldn't call myself a trader nor an investor. Just a guy that looks for companies with potential, good earning growth, sales growth, good management (hmm DIL) etc, and looks for a good time to get in based on what the market does.

Disc: bought in mid 6s, sold at 7% loss as per my stoploss strategy. Hungry to re-enter, but will not do so until 1. audit is out, 2. results are positive, 3.trend/sentiment reverses (look for some big volume days me on positive gains thinks).

I still agree that the story has not changed, but the river flow has. For me it is not worth swimming in this one right now

[MAC]

A hope your right CJ, certainly I believe the US market would have treated DIL in a more tempered manner over the last couple of months. DIL's FY12 auditors were Holtz Rubenstein Reminick, LLP based in New York.

[winner69]

Pulled up my spreadsheet with all the DIL quarterly stuff on it and did a bit of analysis - ratios/growth rates and all that sort of stuff to see what might ne happening

The last few quarters are all over the place and nothing seems to be consistent with the past. At least when the CFO they moved on was around things looked quite consistent and sort of in a steady state ..... ummmm

If cash flows are the things that should be correct all I really know is that cash flows have flattened out (actually slightly down) recently ,,,, thry cant seem to get past the $20m mark on a rolling four quarter basis.

Has anybody tried to make sense of the deferred receipts revenues in the annual reports?

[Snow Leopard]

...Has anybody tried to make sense of the deferred receipts revenues in the annual reports?

Deferred [receipts] revenue = money received in advance for services yet to be rendered.

This number will increase in the restated accounts if we ever see them.

Whats the problem?

Best Wishes
Paper Tiger

[winner69]

Deferred [receipts] revenue = money received in advance for services yet to be rendered.

This number will increase in the restated accounts if we ever see them.

Whats the problem?

Best Wishes
Paper Tiger

Understand all that PT but the reconciliation of the movement of deferred revenues in the Annual Report is hard to follow.

I can see the movement in the balance sheet account showing up the cash flow / income rec but it the numbers on the top half of Page 5 that confuse me a bit.

It looks like actual sales for the year were about $52m

Maybe suss it one day .... anyway they all going to change anyway

[Snow Leopard]

It is an attempt to reconcile recognised revenue for the year against sales for the year



Contracted Sales 2012
$52.33


For 2013 and paid
$15.17


For 2013 but not yet paid
$13.07


Recognised as revenue in 2012
$24.09






Revenue 2012
$39.44


Sales in 2012
$24.09


Sales in 2011 and paid for in 2011
$6.81


Sales in 2011 and paid for in 2012
$8.87


Foreign Currency adjustment
-$0.33



The $24.09 is exactly the same thing in both halves.
The $15.17 (top) and $6.81 (bottom) are sales recognised as deferred revenue in the 2012 & 2011 accounts as the money was in the bank.
The $13.07 (top) and $8.87 (bottom) are sales unrecognised as revenue (deferred or otherwise) in 2012 & 2011 because no money was received.

All amounts are US$ millions

Best Wishes
Paper Tiger

[bonne vie]

Roadrunner - so will we see a bid for 88000 DIL in the next week or so. House under contract, only Porsche and dog to go?

[winner69]

It is an attempt to reconcile recognised revenue for the year against sales for the year



Contracted Sales 2012
$52.33


For 2013 and paid
$15.17


For 2013 but not yet paid
$13.07


Recognised as revenue in 2012
$24.09






Revenue 2012
$39.44


Sales in 2012
$24.09


Sales in 2011 and paid for in 2011
$6.81


Sales in 2011 and paid for in 2012
$8.87


Foreign Currency adjustment
-$0.33



The $24.09 is exactly the same thing in both halves.
The $15.17 (top) and $6.81 (bottom) are sales recognised as deferred revenue in the 2012 & 2011 accounts as the money was in the bank.
The $13.07 (top) and $8.87 (bottom) are sales unrecognised as revenue (deferred or otherwise) in 2012 & 2011 because no money was received.

All amounts are US$ millions

Best Wishes
Paper Tiger

Thanks PT ...a lot clearer now

Think I will just monitor cash flows

[baller18]

Understand all that PT but the reconciliation of the movement of deferred revenues in the Annual Report is hard to follow.

I can see the movement in the balance sheet account showing up the cash flow / income rec but it the numbers on the top half of Page 5 that confuse me a bit.

It looks like actual sales for the year were about $52m

Maybe suss it one day .... anyway they all going to change anyway

What is this suggesting again? Problems with management..
Even when the re-audit comes out, and everything is corrected, why would the SP rocket up?
Unless the revenue has increased 5-10% rather than dropping 5-10%, at this stage, most likely a drop of 5-10% (please let me be wrong).
If it does drop 5-10%, the sentiment of the market will have to digest all this and slowly build its confidence back in Dil... With all this bad news and sentiment in the last 3 months and another extra 2 months to wait, the credibility of Dil is definitely taking a hit.

[zigzag]

Perhaps they are just doing a Fonterra. Next announcement will be "Sorry folks, false alarm. The books were correct in the first place."

[MAC]

We have all, fund managers, institutions, investors alike now had a couple of months to assess likely adjustments to DIL revenues and accounts in general.

Institutional and broker valuations remain in the $7 to $8 range as do the intrinsic valuations of the fundamental analysts on this forum including myself. Thus investors it would seem, at this time, anticipate little impact on valuations from the outcome of all Deloitte’s good work.

The key difference now is that, at last, we all have a timeline to work to and an announcement to expect on 28th October 2013. We can all now manage our investments and time horizons to a specific decision point in time.

When the delay was announced on 6th August 2013 the SP was $6.05, I would not be at all surprised to see the SP close to $6 again whilst we await the announcement during the last week of October.

Depending on the outcome (most likely neutral) we should probably thus anticipate an SP return to fundamental valuation over time, perhaps by FY13 (January 2014) ?.

Storms in tea cups don’t last, markets always return to fundamental values.

I wish you all a better few months ahead.

Mac

[MAC]

Yes, and then of course during that timeframe there is also upside potential beyond those valuations of a possible announcement of a second product range. A few months on now plenty of good development work must have been occurring.

[baller18]

To mac & moosie,

Are you guys accumulating since these shares are "so cheap?"

If you believe in the story, are you guys selling other shares to get into Dil, since its such a bargain at these prices...

[Xerof]

To mac & moosie,

Are you guys accumulating since these shares are "so cheap?"

If you believe in the story, are you guys selling other shares to get into Dil, since its such a bargain at these prices...

rumour has it moosie has cut his antlers off, sold them to Silverhorn as aphrodisiac, and will be plundering the offers on Monday:p

FWIW I began reaccumulating with some of my sale proceeds last week, in small amounts, and daytraded some on Friday, but kept some as well.

Can't speak for mac (or moosie either really)

Monday close is awaited with great anticipation

[MAC]

To mac & moosie,

Are you guys accumulating since these shares are "so cheap?"

If you believe in the story, are you guys selling other shares to get into Dil, since its such a bargain at these prices...

Hi Baller, happy to make a declaration as always if so specifically requested.

I'm a long term holder of DIL and have been since early 2012. I saw the exit point at $8.20 and at the time chose to continue to hold for the next one. I like to invest for multiple years rather than months.

I manage risk with research, FA analysis and diversification, and increased by holding in DIL at $5.50 prior to the 6th August delay announcement, this presented itself as a 'very good' entry point, top up point in my case.

My $5.50 parcel took my holding up to 8.8% of portfolio, as a rule I wouldn't go over 10% for a technology stock. Now that we have been presented with a further opportunity, and to answer your question, I am considering taking advantage of what is now an 'exceptional' entry point and increasing my holding up to my 10% limit this coming week.

[Roadrunner]

Roadrunner - so will we see a bid for 88000 DIL in the next week or so. House under contract, only Porsche and dog to go?

Haha!Hello bonne vie....yes,it`s been a good week-end.Sealed the deal on the house Saturday morning(subject to contract) and today had a couple come and have a look at the Porsche,who seem genuinely interested.It looks like robbo24 has got first offer on my dog Lucky too lol!!The house will take until 18th October before I get the dosh.This is 10 days before DIL announce their first restatement of accounts.Time will tell whether that works out well for me or not.At the end of the day I will pay whatever the going rate is.Obviously from a purely selfish point of view I would like the doom and gloomsters to still be keeping the SP down to these bargain basement levels and this may be the case until people see the cold numbers and realize that despite this fiasco nothing has changed.Personally, I think the first stage to DIL`s recovery has just happened.Clarity and freedom from the uncertainty will help the tide to turn albeit slowly.All in all, once I`ve sold everything and cleared the mortgage I will be looking to have a total holding of around 76000 at these levels.So much more relaxing with a 5 year plan :)

[Roadrunner]

if you get thosr shares I somehow doubt you will be living in palmy for much longer RR. if you upgrade to a Ferrari as well can i have dibs on first ride eh?

Haha!Yep you are on thats a deal Moosie :t_up:May have to get a convertible to accomodate those antlers tho!

[baller18]

So I sold half of my holding at $4.55 on friday.. Sighs... looks like its going to come back and bite me in the ass!!!

[baller18]

I have to admit it is out of despondency... sighs x1000

[Xerof]

Despondency?

A gentle reminder of where that fits

[gonzo56]

Excellent representation of how emotions correspond to a SP Xerof. This image should be on the Direct Broking website, it may save people a lot of heartbreak.

[baller18]

Sorry, but why did you do that?

EDIT: In hindsight - you don't need to answer that. Everyone's circumstances are different, and I note you have posted above you were despondent. I think you made the wrong decision, but I apologise, its not for me to ask why.

Hey SPC, I just think the downtrend hasn't stopped and despondency as well, will re-enter again sometime.


Cheers!

[CJ]

Lots of talk about the share price and how "cheap" it is with very little mathematical analysis of what the re-statement might look like and next-to-bugger-all about the business and environment in which DIL operate in. I went back and forwards with someone else on this thread a while ago when the issue was first raised. I got reasonably comfortable that it was only a tiny timing adjustment - At most 10% recorded earlier (1/12 plus a bit more due to growth) and with corresponding higher income in future periods to offset. Therefore, more likely a 5% adjustment.

Business is great (well everything except the head office - sales and Tech are fine).

Environment is fine (a few bombs in Syria wont stop directors meetings - if anything, there will be a few more)

And what else could possibly go wrong now that Weldon is on the board [heavy sarcasism]

[Snow Leopard]

This a funny thread ...

Lots of talk about the share price and how "cheap" it is with very little mathematical analysis of what the re-statement might look like and next-to-bugger-all about the business and environment in which DIL operate in. Looks more and more like the ADV thread by the day.

Investing at its best [heavy sarcasism]

Oh come now, Belgarion, you only have to go through 2000 posts of mostly nervous holders trying to reassure each other and themselves that it will be alright on the night and you will find a few excellent analyses of accounts and value.

Just tell us that you are not doing one of your inverted pyramid schemes on this and everybody can relax.

Best Wishes
Paper Tiget

[robbo24]

Hey SPC, I just think the downtrend hasn't stopped and despondency as well, will re-enter again sometime.

Baller picked the last one so you should all follow what he is doing.

Baller will re-enter when he wants to, not when all of you naysayers tell him to.

[Lorne Ranger]

Psychologically I think having some confirmed dates in mind *feels* much better than it did last week. Sellers will now know exactly what they are turning their backs on (well pending other dramatic disclosures, I mean they have dates and some assurances of content). Given all else is unchanged, and excluding some global meltdown, I still think the stock will be no higher than 5.30 by the end of the month. Should head to 6 with positive interim news early Oct. I actually don't think the Oct 28 announcement will do much for the SP, given that the price already reflects the worst (no, or poor, announcement), and the news early October will include relevant highlights, the 28th report might not add much to the game. Im picking an Xmas price of $6.41. Anyone care for a wager? I seem to have developed a taste for it in the last couple of months.

Disclaimer: This price was carefully calculated by the voices in my head, and a fiscal quoijiboard fueled by the blood of a virgin chicken.

Accordingly DYOR.

[robbo24]

Let me take a moment to remind everyone that the market does not price companies based on historical financials, but on future financials. So the restatements are unlikely to be material in determining the DIL share price in the long term. Of more concern were the other statements that the company made in its US filing -

1. "New sales in non-US markets continue to be strong while the Company has experienced slower new sales growth in the US for the second quarter."
Since the US is by far the main contributor of DIL revenue (72% to be exact), that is a BIG concern. Especially since the Europe/ME/Asian sales growth is much lower (even off a much smaller revenue base (11% of total sales) in the first place) - "First Quarter 2013 EMEA sales of $1.6 million represented 20% year-over-year growth" (so if they consider 20% YoY growth to be "strong" what does that say about future prospects?)

2. "During the second quarter of 2013, Diligent signed a total of 173 net new client agreements, as compared to 216 net new client agreements in the second quarter of 2012". That's a 25% drop in sales! And its also a big drop from the already slowing previous quarter sales of 201 net new client agreements (a 14% decline for those playing at home). One quarter may be a blip, but two quarters is a trend.

A company that is priced for exceptional growth has to keep delivering it. I believe that it is the slowing sales growth that is causing the share price to come back to earth, not the accounting issue. DIL is currently trading on a P/E of 46 - making it still hugely expensive even at $4.70

These issues were discussed with some interesting points on the day when the report came out a few weeks ago - the numbers you've highlighted aren't quite as gloomy as you make them out...

[robbo24]

I guess that means we are still in the DENIAL stage of Xerof's chart!

I didn't say they were astounding figures but you don't comment on the reduced cost-per-client and whether a decrease in new clients is offset in any way by an increase in profit...

What stage of Xerof's chart are you in?

[CJ]

These issues were discussed with some interesting points on the day when the report came out a few weeks ago - the numbers you've highlighted aren't quite as gloomy as you make them out...exactly. They had the same increase in Revenue from the lower number of new clients so it was just a shift in the make up (more big fish, less little fish, same tonnage).

KW - The charts do look bad but we all know that Charts dont always reflect fundamentals (doesn't mean I done dream about selling out a few months ago when it was in the $8's and buying in again last friday morning at $4.20).

[baller18]

Kicking myself in the head for selling out on Friday!!! Arghhh!!! I'm such a nervous Nellie!!! Why?! Why?! Why?! After I had hold onto it for like 4 months!!!

[Whipmoney]

Kicking myself in the head for selling out on Friday!!! Arghhh!!! I'm such a nervous Nellie!!! Why?! Why?! Why?! After I had hold onto it for like 4 months!!!

Lol buy back in.

[PlatnuM195]

Let me take a moment to remind everyone that the market does not price companies based on historical financials, but on future financials. So the restatements are unlikely to be material in determining the DIL share price in the long term. Of more concern were the other statements that the company made in its US filing -

1. "New sales in non-US markets continue to be strong while the Company has experienced slower new sales growth in the US for the second quarter."
Since the US is by far the main contributor of DIL revenue (72% to be exact), that is a BIG concern. Especially since the Europe/ME/Asian sales growth is much lower (even off a much smaller revenue base (11% of total sales) in the first place) - "First Quarter 2013 EMEA sales of $1.6 million represented 20% year-over-year growth" (so if they consider 20% YoY growth to be "strong" what does that say about future prospects?)

2. "During the second quarter of 2013, Diligent signed a total of 173 net new client agreements, as compared to 216 net new client agreements in the second quarter of 2012". That's a 25% drop in sales! And its also a big drop from the already slowing previous quarter sales of 201 net new client agreements (a 14% decline for those playing at home). One quarter may be a blip, but two quarters is a trend.

A company that is priced for exceptional growth has to keep delivering it. I believe that it is the slowing sales growth that is causing the share price to come back to earth, not the accounting issue. DIL is currently trading on a P/E of 46 - making it still hugely expensive even at $4.70

Why would the PE of 46 be expensive now, when the market was valuing the company at a significantly higher PE around $8.20. It's not as if this news wasn't available back then. It seems as if the only reason for the drop right now is negative sentiment. If it was a worry about lack of growth, I thought this would have happened a lot earlier (just after the report).

[robbo24]

Kicking myself in the head for selling out on Friday!!! Arghhh!!! I'm such a nervous Nellie!!! Why?! Why?! Why?! After I had hold onto it for like 4 months!!!

Look at the chart - DIP SP has had minor little rallies before... What do you think will happen? Will it go down again, or will it continue to go up? Based on what reasoning? Is there another stock that could provide you with more certainty, or has DIL taken from you and now you want to take it back from DIL?

[winner69]

KW ... interesting comments .....it just happens that the periods of those reduced client numbers you bolded coincide with cash flows being down .....which makes sense ....... and valuations are best done on future cash flows eh?

But I think you and me just don't understand things properly ... At least we are not in denial

[kizame]

Hi Sparky,the bump up today is only a slight correction after Fridays close down on big volume,the rise today was small on lower volume.
the stocks fall is quite steep,and 13c is only a small bump,I wish I could say something more positive but...alas it's still in a big downtrend unless this bump continues and investers gain confidence that the slide has halted.
I can't help but wonder if there is more to this than the restating of earnings.

[Baa_Baa]

DIL has little to do with fundamentals IMHO, it's had a nice run up to the heavens and blown all rational FA out of the water. Naturally on a bit of bad news, the profit holders would want to bank their profits and look for a re-entry, assuming they still like the upside potential (pity we can't short stocks here).

In any event, traders will love the volatility and probably be using some chart to keep eyes on the movements.

Here's a rough hack at what I see. Disclosure, I have a tiny holding of DIL, I started buying around 6 on the way down. I'm happy to let it thrash around here. I'd pile in on a 5.75 upside breakout if it gets there before a 3.75 slump, which I'll also buy. Basically, I'm buying between those numbers, as much as I can anyway.

Baa
4774

[JohnnyTheHorse]

A break of $4.80 would be a short term buy signal, watch for it tomorrow morning. If it breaks it, I would guess it may get back to $5.25 then fail at that resistance. I suspect we will see a fair bit of bouncing around in the next couple of months.

[blakecb]

Hi Sparky,the bump up today is only a slight correction after Fridays close down on big volume,the rise today was small on lower volume.
the stocks fall is quite steep,and 13c is only a small bump,I wish I could say something more positive but...alas it's still in a big downtrend unless this bump continues and investers gain confidence that the slide has halted.
I can't help but wonder if there is more to this than the restating of earnings.

Yeah I agree, downtrend channel still well intact. All the indicators still looking pretty red too.

[robbo24]

And if you notice from BaaBaa's chart, the downtrend has accelerated pretty significantly since Aug 6 when the 2nd quarter's poor sales figures were announced. So June to Aug - slow downtrend on restatement announcements, since Aug a much sharper downtrend. That's the thing - when in the EUPHORIC stage, bad news is ignored. When in DENIAL phase, bad news is explained away. When in the FEAR stage (where I think we actually are) people begin to respond to bad news.

Great, so the introduction of fear can explain away the drop in SP.

Provided your diagram model stands up to reality..

[winner69]

You do know that stockbroking analyst reports are nothing more than marketing fluff designed to drum up stockbroking fees from a client base too dumb to make their own decisions. They are not worth the paper they are written on, and they bear no reality to the actual value of a stock. If stockbrokers WERE any good at picking stocks, they would have already retired to the south of france, or be heading up their own hedge fund. Only the dummies broker stocks, and the analysts are one rung down from brokers!

Always have a laugh at the charts that macquaries for one produce on their reports showing the stock price, the index and little dots for their targets.

The dots are mostly much higher than actual shareprice (off course) but when after a few months or so when the gap doesn't close they start reducing targets and the targets get closer to the actual price and the chart makes them look like gurus. What they don't seem to get is the the actual price seems to be the driver (lead indicator) of their target price -gurus eh

FBU has dolled them. Mac had target of about 12 bucks in 2011 but it gradually reduced and the latest target is 790 ....oops ..... A upgrade coming methinks .... Lts do the sums, current shareprice 900 so we calculate guru style 935 eh ... Buy buy.

Macquarie are quite honest in their table of what % are outperforms etc. ..... Currently only 10% or so are under perform on the asx

Bet if Duetsch did another report know the target for DIL would drop from there current target .... Reality says take 15-20% off that ... And DIL prob really valued at 5bucks

Oh shucks KW ... We both in trouble now.

[winner69]

Their latest report was released on Friday with a target price of $7.20. :)

That's good ....nice one

KW says that should get a few clients to buy shares in DIL

[PlatnuM195]

I would think that a realisation would normally be triggered by some event i.e. dropping revenues, bad reviews or reduction in retention rates. No such event has occurred besides the account restatements.

[PlatnuM195]

For AAPL it seems more clear though. The slide from ~$700 happened immediately after the 25th October 2012 earnings announcement. From what I remember, there was widespread disappointment over stagnating growth numbers.

With DIL though, the drop from ~$8 occurred on the 8th of June, whereas the previous earnings announcement was around May. By June, the earnings announcement should have been heavily analysed and digested so unless it was a severely delayed reaction it seems unlikely that earnings triggered the downtrend.

[blackcap]

That depends on what the market was expecting. If the market had priced DIL to deliver $4.5 then yes, that would be exceptional. If the market had priced DIL to deliver $6.5 then that is a poor result. Pricing is based on expectations of future performance - if the company exceeds that, the price goes up. If the company does not meet expectations, then the price falls. DIL at $8 was priced for some truly exceptional results, but actual results are significantly reduced from 2012 levels.

If this was any other company that announces "we are experiencing a 25% drop in sales" what do you think would happen to their share price. For a hint, take a look at CDA on the ASX. Or for an even better one, look at Apple (AAPL)

Good call KW. It is all about expectations. So often on the news (tv 3 or tv 1) we hear of a company making "record profits" and then the announcer in an almost bemused not quite understanding voice saying "yet for some reason the price slipped today". A record profit is fine but if it is not as much as is expected then the price of the stock will fall. DIL case in point. Expectations whatever they may have been not met and the share price falls. The reverse applies as well... a loss that is posted that is not as big a loss as expected will raise a SP. All about forward looking expectations and how much and what has been priced into a share price.

[blackcap]

I think that's the sort of comment that causes legal action against this sharetrader site from Deutsche Bank/Craigs and Macquaries. I think it most unwise for KW to describe top NZ broking firms in such a fashion. You might care to edit that comment KW. Just a thought.

Its a bit late now for editing that is now that you have put it in your reply Sparky ;)

[nextbigthing]

I wonder how closely these big firms traders follow these threads to gauge the sentiment of us all?

[Balance]

I wonder how closely these big firms traders follow these threads to gauge the sentiment of us all?

Not a hoot - they operate in the world where hundreds of millions change hands.

The media does though and that's where the firms will take note of what gets written (in the media).

[winner69]

For AAPL it seems more clear though. The slide from ~$700 happened immediately after the 25th October 2012 earnings announcement. From what I remember, there was widespread disappointment over stagnating growth numbers.

With DIL though, the drop from ~$8 occurred on the 8th of June, whereas the previous earnings announcement was around May. By June, the earnings announcement should have been heavily analysed and digested so unless it was a severely delayed reaction it seems unlikely that earnings triggered the downtrend.

Plat.- the 6/8 announcement of a further delay but disclosing a few numbers was a key one that ensured the slide in the shareprice continued.

It's all bout managing expectations eh ....and cash flows are not subject to revision.

Besides the client numbers growth slowing that KWreferred to the key number was the 2nd quarter cash flow was only $2.5m ....down from $5.5m the year before ....and key was way below analyst expect ants of $5-$6m (as some reported here). Ok some reasons given but even if accepted as valid cash flow was down on year prior

This started a trend .....H1 FCF was less than the year before as well. And this is a growth company?

Quarterly FCF did increase impressively and got to $7.9m in Q4 21022 but its been downhill since then ......doesn't that sound alarm bells?

That was the signal for me to cash in my long term profits .. A bit slow in doing so but stil really happy with the outcome over the last few years.

[winner69]

Absolutely are not.

And I don't think this is a typically lazy post as you suggest. My position has been consistant. DIL's business model does not justify the sp. (As KW points out below and other have too.) DIL's only justification for it past value (dare I say current value too?) is if someone comes and buys them out to add to an already extense software product portfolio.

30+ years in IT tells me that ICT-illiterate (dumb) C-level officiers and mostly worthless directors thought iPads were cool and wanted to show off in their business class seats as they flit from one pace to another.

What DIL do can be done very inexpensively and yet very conveniently without the passe iPad statement.

Not " typical lazy" - just very succinct!

So belg you saying that DIL had not built their 'moat' yet?

[winner69]

Big conference coming up in Aust

Diligent seem to be a major sponsor .....but the competitor Boatdvantage getting exposure as well sponsoring key note speakers

Trade stands could be interesting
http://csaconference.com/program/#day1

[Whipmoney]

If this was any other company that announces "we are experiencing a 25% drop in sales" what do you think would happen to their share price. For a hint, take a look at CDA on the ASX. Or for an even better one, look at Apple (AAPL)

That's a 25% drop in Sales growth.. Not total sales...

[CJ]

Diligent seem to be a major sponsor .....but the competitor Boatdvantage getting exposure as well sponsoring key note speakersAnother stuff up by Dilegent, this time by Marketing.

If you are gong to sponsor an event, you get an exclusive agreement in your area.

Who can remember the Olympics debarkle where ANZ stole ASBs thunder by being the official insurance provider to the NZ team (which was probably a lot cheaper than being the official bank).

[Hoop]

Sneaky stuff this morning before opening???

The 1 share buy at 485...Hmmmm coincidence eh.....or relying on people who don't dig further than raw buy/sell figures would think there is going to be a strong opening.

http://i458.photobucket.com/albums/qq306/Hoop_1/DILDepth03092013.png (http://s458.photobucket.com/user/Hoop_1/media/DILDepth03092013.png.html)

[edm]

Hi everyone,

I am just wanting to get an insight into a micro trade which is happening at the moment with DIL... is this just as a joke or is there something else which I am not seeing...?

Thank you for your help.

Buyers

Buy Quantity

Prices


1
1
$4.850

[Balance]

Hi everyone,

I am just wanting to get an insight into a micro trade which is happening at the moment with DIL... is this just as a joke or is there something else which I am not seeing...?

Thank you for your help.

Buyers

Buy Quantity

Prices


1
1
$4.850



Not sure about NZ but on ASX, it means there is a crossing to be done at $4.85 but deal must be done by another broker first at $4.85 to allow the crossing to go thru.

[Mista_Trix]

That's odd, ANZ isn't showing that trade, either the offer or having gone through.

[Balance]

Not sure about NZ but on ASX, it means there is a crossing to be done at $4.85 but deal must be done by another broker first at $4.85 to allow the crossing to go thru.

And totally to be expected, a big buyer emerges and the traders all try and hop back on board by paying a higher price than the volume indicated price of $4.85.

Bear trap?

Could be a big seller just lurking at $5 to smash the buyers as they emerge.

[iceman]

That's odd, ANZ isn't showing that trade, either the offer or having gone through.

Yes ANZ did show it earlier this morning when there was only one buy order at that price. Since then another buy order has come in for 2010 shares so ANZ currently showing 2 buy orders for a total of 2011 shares at $ 4.85.

[baller18]

Please kill me!!!!

[iceman]

Please kill me!!!!

Baller I've been skiing all weekend. May go again tomorrow. It's very relaxing. You should try it :)

[CJ]

Please kill me!!!!Dont worry - I sold out of FBU when they released their (IMHO) average results earlier this month.

Better to be out of a winning stock that in a losing stock.

[MAC]

Cheap implies low quality, I actually think DIL are best in breed when it comes to boardbooks ?

[Hoop]

Please kill me!!!!
Learning experience..eh
Being out has its benefits you're got the cash to buy in at any opportunitic moments ..I missed this mornings opening (very short term buy signals) but watched it FAIL** at 500 support..
Just cancelled my buy order. The shareprice behaving the way it is seems to be attracting the Opportunists which makes this share price volatile.
For the longer termers the chart is horrible ...420 could be the bottom is the short term buy signals continue which would eventually spread into medium term then long term with time.....IF the short term sell signals return then 420 bottom is likely to be revisited.....Often with a reversal the bottom is retested in the near term. Remember jumping in with short term buy signals triggering with intentions to hold long term is a very risky practice...

** be careful... as I'm relating to short term sell signal movements ..who knows what might happen later in the day....could expect a 500 revisit

[robbo24]

Please kill me!!!!

Baller, once I bought XRO at $3.80. It went down to about $2.50 or so and I thought the world was coming to an end. All the talk on the forums about hype, and customer numbers and competition...

I didn't sell because I bought for rational reasons and the only thing making me consider selling was emotional reasons.

Look at XRO now...

I bought some more XRO at $5.80... Look at XRO now...

[winner69]

You long term holders who believe the DIL story sure take a great deal of interest in nearly every trade

Remember what Taleb said ....this only causes you unnecessary grief


. Let us manufacture a happily retired dentist, living in a pleasant, sunny town. We know a priori that he is an excellent investor, and that he will be expected to earn a return of 15% in excess of Treasury bills, with a 10% error rate per annum (what we call volatility). It means that out of 100 sample paths, we expect close to 68 of them to fall within a band of plus and minus 10% around the 15% excess return, i.e. between 5 and 25% (to be technical; the bell-shaped normal distribution has 68% of all observations falling between -1 and 1 standard deviations). It also means that 95 sample paths would fall between -5% and 35%.

Clearly, we are dealing with a very optimistic situation. The dentist builds for himself a nice trading desk in his attic, aiming to spend every business day there watching the market, while sipping decaffeinated cappuccino.

The dentist is clearly a skilled investor. With a mean return of 15 percent and a volatility of 10 percent, the dentist can expect to be successful 93 percent of the time in a given year. That is, the dentist will achieve positive excess returns. When examined on extremely short time scales, however, the dentist will have only a marginal chance of achieving positive excess returns. On a given second, for example, the dentist has a 50.02 percent chance of success:

Over the very narrow time increment, the observation will reveal close to nothing. Yet the dentist’s heart will not tell him that. Being emotional, he feels a pang with every loss, as it shows in red on his screen. He feels some pleasure when the performance is positive, but not in equivalent amount as the pain experienced when the performance is negative.

At the end of every day the dentist will be emotionally drained. A minute-by-minute examination of his performance means that each day (assuming eight hours per day) he will have 241 pleasurable minutes against 239 unpleasurable ones. These amount to 60,688 and 60.271, respectively, per year. Now realize that if the unpleasurable minute is worse in reverse pleasure than the pleasurable minute is in terms, then the dentist incurs a large deficit when examining his performance at a high frequency.

Just relax and look at how your long term investment is doing only once a month ...or once a year

[Balance]

It's cool, W69 matey.

In the end, the truth will out.

Meanwhile, the market will get driven by the usual fear, hope, greed and in DIL's case, sheer terror? :D

Sheer terror it was.

Now greed and hope taking over.

[Balance]

Looks like big buyer prepared to pay up - 100k crossed at $4.95.

Now everyone else is scrambling one above the other to get stock at $5.00.

Where were they at $4.35?

Oh, it was terror at that time so selling at $4.35 was a great idea?

[Xerof]

I ain't sayin' nuffin

[winner69]

Been a tough last 10 weeks for DIL with almost 40% wiped off the value of the company. I suffered as well by not being disciplined enough to sell when the ATR said so and then waiting a bit more. Did eventually sell and locked in multi year profits but should have been heaps more.

so 10 weeks of the shareprice falling .... only 2 weeks have been positive and that was only a few cents to get excited about. Been a couple of lowish volumes weeks but overall volume has been pretty average.

Does 10 weeks of downtrend represent panic .... wouldn't think so. Panic only lasts a short time.

Obviously in the eyes of the market DIL is not seen in the same light as it was. Is the market stupid ... generally not but who knows.

A guy called Templeton who supposedly was a guru said "To buy when others are despondently selling and sell when others are greedily buying requires the greatest fortitude and pays the greatest reward.". Some have shown both despondency but most on this thread have shown the greatest fortitude. Good on them because according to Templeton they should get the greatest reward. But Keynes said "The market can stay irrational longer than you can stay solvent." - remember this

Templeton also said "Bull markets are born in pessimism, grow on skepticism, mature on optimism, and die of euphoria.". Maybe DIL has had its bull run. I didn't mention the word euphoria on this thread the other day, somebody else did.

Will things get better next week. Who knows but one would have to say that momentum is with the sellers at the moment .... maybe like me the profit takes who have held for a long time and cash up and move on to something more exciting

Maybe Hoop can do one of his famous OBV charts and tell us what it is saying ... please Hoop
Chart is weekly changes in share price since peaking

Far better picture now ..... instead of 2 out of 10 up weeks it is now 3 out of 12

Just the up week (to 23/8 was +3% and the down week was -11%

Maybe Talebs dentist wouldn't even want to check prices weekly

Just trying to get the price up .... last time I mentioned this there was a good week and this week started off OK so here's hoping

[Snow Leopard]

I ain't sayin' nuffin

Neither am I

4779

Best Wishes
Paper Tiger

[Balance]

Neither am I

4779

Best Wishes
Paper Tiger

Pretty brutal the way they slaughter the bull with one chop of their butcher's cleaver!

But DIL needs PT to talk the stock down when it is down so the traders can pile in - or get out?

[baller18]

Oh my so Dil is on a bull run now? Short?

[Snow Leopard]

Pretty brutal the way they slaughter the bull with one chop of their butcher's cleaver!

Thought it best not to post a picture of that.

Best Wishes
Paper Tiger

[blakecb]

With a high level of certainty, the worst is behind us! Very happy holding this stock. :):):)

There is as yet, no evidence of that.

See attached - I have done a linear regression channel, which basically has two lines as per a channel - the lower acting as support and the upper acting as resistance - the linear regression part is the middle line. You can see the price bouncing around in there. To beat it, you would want to see a close today above around $5.22, to be followed by a higher high and higher low the following day. You really want to see that $5.50 resistance broken as well before piling onto this stock.

Take a look at the RSI and DMS on this as well....together they really seem to be able to pick DIL, trading off those two alone you would have done very well.

So what I am looking for with a turnaround: RSI over 50, DMS signal line cross and over $5.50 on good volume. Too much to ask?

4782

[Theracay]

You really want to see that $5.50 resistance broken as well before piling onto this stock.


Is now a good time to mention I wanna pull out at $5.50? :)
Depending on how long it takes to reach.

[blakecb]

Is now a good time to mention I wanna pull out at $5.50? :)
Depending on how long it takes to reach.

hahaha that illustrates resistance perfectly! People buy and watch the price drop with increasing anxiety, only to have a price in mind that "as soon as it gets back to" they will sell at (often a round number). When the price moves up to this figure, the market is then flooded with supply, which in turn pushes the price down. Sellers who missed out on the first test of resistance then wait dutifully for it to get back up to that figure again, at which point a fresh wave of people sell pushing the price down again, and so on (seen recently with CNU). TA should really be TP (trading psychology).

[baller18]

Thanks heaps blake!!!

[Xerof]

TA should really be TP (trading psychology).

it is

that is a prime example of how people struggle to make money. If $5.50 is taken, you should be buying, not selling

I give up.......


I see buzz-o-bumble is selling this arvo, what a blot on the sharemarket that crap is. I'm phoning David Shearer about it.....

[Theracay]

hahaha that illustrates resistance perfectly! People buy and watch the price drop with increasing anxiety, only to have a price in mind that "as soon as it gets back to" they will sell at (often a round number). When the price moves up to this figure, the market is then flooded with supply, which in turn pushes the price down. Sellers who missed out on the first test of resistance then wait dutifully for it to get back up to that figure again, at which point a fresh wave of people sell pushing the price down again, and so on (seen recently with CNU). TA should really be TP (trading psychology).

Haha guilty as charged. Not that I'm nervous or worried about the company. Just impatient.
I reckon the price will just float around the same range till the results come out or continue decline. If it reaches 5.50 soon I'm gonna take some out and put the money elsewhere. Otherwise I wait.

[randoman]

ACC getting a bit more involved at $4.53...https://www.nzx.com/companies/DIL/announcements/240612

Lends some credibility. Pity I was one of the dorks that sold a bunch at $4.35 :/

[Balance]

I'm astonished ACC bought in when the linear regression channels are so risky.

They like doing the opposite of Milford?

Milford still wondering why Ecoya and Moa proved to be 'too risky' for their clients?

[randoman]

I'm astonished ACC bought in when the linear regression channels are so risky.

Not to mention the parabolic discombobulation oscillator!

[robbo24]

I'm astonished ACC bought in when the linear regression channels are so risky.

Damn not again... If only we couldve warned them

[blakecb]

I'm astonished ACC bought in when the linear regression channels are so risky.


Edit: Apologies for the sarcasm

:) No need for apologies.... I will point out that we have discussed elsewhere how useless ACC is when it comes to their share purchases.

I can't for the life of me understand what business ACC has being in the share market. Has the media ever picked up on this? Seems bizarre they are trying to rid themselves of long-term claimants to free up cash to buy DIL.

[robbo24]

Whatever criticisms you might have of the no faults system, it is mandated by the public and by successive governments.

http://www.acc.co.nz/about-acc/overview-of-acc/PRD_CTRB110932

Not quite, ACC are bound by statute to invest as if a trustee. ACC must do this, it's not a choice: http://www.legislation.govt.nz/act/public/2001/0049/latest/DLM103186.html

[pierre]

I'm astonished ACC bought in when the linear regression channels are so risky.


Edit: Apologies for the sarcasm

I enjoyed that one Sparky.

But, those linear regression channels are not just risky - they're downright dangerous especially considering the lighthouse keepers haven't been on duty for quite some years now!

[iceman]

My father bought in today at $4.95. Time to sell out :)

Lucky I sold all of DIL in my trading portfolio today, at a bit (12%) of a loss. Even more lucky (hopefully) that my wife bought a higher number of shares for her long term investment portfolio. Not sure what to read into your Dad and my wife going for a ride together moosie :mad ;: