IVT - Inventis

[Lizard]

I've followed this micro-cap company for a while, but only just bought a handful at 10cps on todays notice of meeting.

At current price, market cap is $10.3m, but they are about to sell off their technology division to end up with $21.5m in cash. They will be left with their furniture business (contains the old NZX, "Damba Furniture"!) and part of their tech business with total sales around $25m, though won't initially be profitable. However, they'll book close to $5m NPAT on the back of the sale.

They are planning to use up to $10m of the cash on a buyback, with equal opportunity off-market offer for half the shares at post-transaction NTA... at the moment, that looks like around 19cps.

That should leave me with half the shares, close to free-carried in a company that still has $25m of sales and $10m in cash, so I'd be surprised if the remaining market cap is below $5m or 10cps.

[drillfix]

Liz, you have a very special Art of finding things, how you it amazes me.

You must read how many reports per week may I ask?

[Lizard]

Hi Drillfix

I read whatever I have capacity for. Some days that might be a dozen reports and other days one or none.

Often I hunt for shares off a database of share data rather than off forums or analyst reports, so that probably explains why I end up with so many odd bods.

I guess that after reading so many years worth of announcements, I am pretty quick to skim for the bits I'm most interested in.

[drillfix]

Well, you sure do have an eye for it that is for sure. :)

Hey, when you say you hunt off a database of shares, which database are you referring to, one from your brokers?

[Lizard]

I used to use the subscription Market Analysis one (www.stockmarket.co.nz), but for now I'm using the free download from AFR site and loading into Excel.

[drillfix]

Thanks for that reply Liz, I often wondered what resources an investor like yourself would be using.

Cheers~!

[Lizard]

I was thinking that for a small-time trade, it could be a goer to buy 8000 (max) at 12cps, and try to work it as an unmarketable parcel post-buyback so that directors opt to buyback the entire amount. Would be worth over $500 assuming 12cps entry and 19cps buyback.... worst case, the price goes up and the half left is not an unmarketable parcel any more - but at least then, it should be possible to sell on market at something above or at entry price!

[Lizard]

PS: I should add that there is always a "worse case" than the "worst case" with these things... i.e. the whole transaction suddenly falls through. Though at this point, it seems unlikely. But more disastrous things have happened... it's only ever a spec punt.

[h2so4]

I like it Liz. The sale is virtually a done deal. IVT short-term liabilities will be covered and the company will have no debt. Should the post buy-back share price be much below 10cps say 7cps you can add it to your list of net nets.:)

[Lizard]

Sale confirmed unconditional. Still need confirmation that the buyback will go ahead for 50% of shares at 19cps, but the few at 10.5cps on the offer still seem like good odds.

[Lizard]

This "low risk" opportunity is not looking so good right now. After weeks of delayed settlement announcements and excuses about paperwork at the buyers end, things seem to have settled into a prolonged silence that has me imagining the lawyers are being consulted - and perhaps other funders - while the deal collapses in some sort of Hungarian-Russian-Cypriot acrimony.

No doubt the silence will not last for long - although they could do without the lawyers fees. And with the current spread of 3.1 - 12, it's in a Clayton's Trading Halt!

[h2so4]

LOL. Well I hope it's not a Clayton's Contract.:)

[Lizard]

Counting eggs as chickens is never without risk. This one has gone from low risk to sky-high risk as we head into year end reporting. Outcomes at this point could be:

the money is cleared and all go (looking unlikely after being strung out this long - though I've no idea why anyone would play such games!)
the deal doesn't go through but they manage to tick on through into next year on cashflow and remaining bank facility
Suspension without a result before or day after due date... and probably re-financing in which existing shareholders end up with crumbs.


They owe shareholders some clarity and the longer they stay silent, the more suspicion arises that they will end up at the latter scenario.

[drillfix]

They owe shareholders some clarity and the longer they stay silent, the more suspicion arises that they will end up at the latter scenario.


Oh geeberts Liz, company sounds like it is being run by URA's Kate Hobbs, the mysterious ego tripping silent treatment type ceo woman whom believes that shareholders Owe Her a High Salary living. (but in the end she is nothing short of being a Career Corporate Criminal)

Dont you just hate when a company does not say anything or they actually can, but they wont?

It is companies like this I completely despise and would vote for a new corporate Law called Corporate Be-headings that should a CEO or Director not state the truth or the complete truth then they are entitled to get their head chopped off. That will keep the Bast's honest, or at least a lot more closer to it anyway.

Sorry for my little outrage Liz, as I completely understand and know how it feels to be riled by that type of management which seems to be littered on some publically listed companies on the ASX and all around the World.

Good luck should you hold and hope you hear something soon from this Mob.

[h2so4]

Counting eggs as chickens is never without risk. This one has gone from low risk to sky-high risk as we head into year end reporting. Outcomes at this point could be:

the money is cleared and all go (looking unlikely after being strung out this long - though I've no idea why anyone would play such games!)
the deal doesn't go through but they manage to tick on through into next year on cashflow and remaining bank facility
Suspension without a result before or day after due date... and probably re-financing in which existing shareholders end up with crumbs.


They owe shareholders some clarity and the longer they stay silent, the more suspicion arises that they will end up at the latter scenario.

Liz

On an emotional scale I still remain hopeful.

Win or lose I have learnt a bit more about illiquid stocks, unconditional contracts, and counting eggs before they are chickens.:)

[Lizard]

Just a catch up on where investors funds go...

http://www.realityravings.com/2012/07/23/the-shire-now-we-know-what-beckaas-dad-does/

[Joshuatree]

Anyone taking up their spp. My entitlement is 11shares for 11c , am still thinking through the ramifications:sleep: