| Tuesday 05 April 2022 Good morning Voornaam,
Twitter was abuzz yesterday with news about, well, Twitter! Elon Musk, arguably the Chief Tweeting Officer of Earth (and Mars) since Donald Trump was cancelled by social media, has taken a 9.2% stake in Twitter. This is lunch money for Musk, yet the news sent Twitter up 26% in premarket trading. Musk has gotten himself into trouble a few times on Twitter so this is a particularly juicy development.
A quick Google search reveals that Trump's Truth Social app has a very long waiting list of people who are interested in the app but can't use it as it isn't ready yet. There are numerous reports of technical glitches. It's not clear at this stage why Musk has suddenly become Twitter's largest individual shareholder but it is clear that launching a new app from scratch isn't easy, even when you are a billionaire or an ex-president. Musk's intentions w ill no doubt be revealed in months to come.
Speaking of Musk, regular followers of my work will know that for two years I've been writing about the competition Tesla faces in the market. In just the latest example, Polestar (a joint venture between Volvo and Geely) has announced a deal to supply up to 65,000 vehicles to Hertz over the next five years. Tesla's deal with Hertz was for 100,000 vehicles over 14 months. Polestar is expected to list on the NASDAQ later this year through a merger with a special purpose acquisition company (SPAC) called Gores Guggenheim. This is effectively a "blank cheque" company used as a shell to facilitate a listing.
Moving to local news, PSG Konsult has released a trading statement for the year ended 28 February 2022. HEPS will be between 69.2 cents and 70.2 cents, which is 33% to 35% higher than the 52.2 cents in the prior year. Most importantly, HEPS is over 40% higher than the pre-Covi d year. The share price closed at R13.20, a Price/Earnings multiple of just under 19x.
enX Group indicated back in December that a special dividend of 150 cents per share could be on the cards based on the disposal of EIE Group, the holding company of enX's Southern African materials handling business. Proceeds of R676.2 million have been received by enX and shareholders will be pleased to learn that the balance sheet is strong enough to justify a special dividend of 200 cents per share. This is approximately a quarter of the company's market cap being returned to shareholders in cash.
As I wrote last week, Pan African Resources is undertaking a small share buyback programme. This has already kicked off and there will be further announcements on the JSE as and when shares are repurchased.
Tharisa announced last week that it had exercised its farm-in option to take its stake in Karo Mining Holdings to 66.3%. Karo Holdings has an indirect 85% interest in the Karo Platinum Project in Zimbabwe. In a subsequent update, Tharisa has announced the appointment of Bernard Pryor as Managing Director of Karo Mining Holdings. This is another good step in the journey of this project, as Pryor comes with extensive experience including being the Head of Business Development at Anglo American (amongst other prior roles).
In other director news, Sasfin has announced the appointment of a new Financial Director. Harriet Heymans has been appointed to replace Angela Pillay. Heymans has previously served as CFO of Standard Chartered Bank, Imperial Financial Services and Ubank.
The revolving door at the Luxe Holdings board continues to work overtime, with the latest development being the resignation of the Chairman of the board. He was only appointed on 1 December 2021!
As a final note on director chan ges, Alex Pickard of Ivanhoe Mines has been appointed to the board of Renergen. This is based on the strategic equity investment made by Ivanhoe in the company.
York Timber announced a further purchase of shares by A2 Investment Partners, the activist investment group that has played a major role in York recently. A2 clearly still sees value in the price, putting another R18.8 million into the investment.
It was a quiet day for JSE news, so my only feature article is on another record auction result from Gemfields. The company is really on a roll. Considering you have some spare time this morning, be sure to listen to Episode 69 of Magic Markets. We learnt all about private debt, an alternative asset class that offers high yields and uncorrelated returns to public markets. The Westbrooke team joined us for this discussion.
In our partner articles, Jaltech (an investment firm offering cryptocurrency baskets) has written some really helpful insights on storage options for your crypto. Although Bidvest Bank is a name you likely know already, this article gives an overview of their services and the way they think about entrepreneurs. Wit h working capital cycles under pressure everywhere, understanding your banking and funding options is never a bad idea.
Have a wonderful Tuesday!
The Finance Ghost
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Local and Offshore Market News |
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