Often Partisan

Postcards from HK: Shares and Bears

Shares in Birmingham International Holdings dropped heavily this morning, dropping to a five year low of HK$0.0615 per share before rebounding slightly. Trading has been brisk with 400M+ shares changing hands – just under 10% of the total number of shares currently available in the company.

It’s interesting that share value has dropped so significantly of late; share prices have more than halved in value since trading in BIH shares resumed in February and although there has been a late rally today I have to wonder if investors are spooked by the warnings of another substantial loss made by the company and the continued poor performance of the club creating a “bear market” in BIH shares. There hasn’t been much said that I have heard with respect to the share prices here in HK; however it does seem that people are very much more aware of Carson Yeung and more importantly the situation that the club have been left in since his arrest.

The decrease in share price also causes complications in BIH’s efforts to raise money with the share price now lower than the price per share offered for the convertible bond, making the deal much much less attractive to the proposed investors, Cheung Shing and Victor Ma Shui-Cheong and has the potential for causing them to want to renegotiate or worse scrap the whole proposal.

One bright light in this murky darkness is the continued rumour that BIH have been told that they can sell up to 24% of the football club to an investor on a “no strings attached” basis – ie there can’t be a deal in place to sell the remainder at a fixed date for a fixed price. I’ve heard mention out here that there could even be a potential investor although any idea of how or when that investment will take place or even who it is not known.

I think next Tuesday and the release of the accounts will put into context the position BIH is in – the debt it is in and how much needs to be serviced immediately. The idea of the convertible bonds and placing of new shares was to ensure that debts were paid off and if the accounts reflect that then regardless of the loss made, the company should be in a better position for the long term. What worries me is that the accounts could come out showing no real change in the long term situ and help maintain the belief that BIH is in a tailspin it can’t get out of and that will take the club down with it in a long, drawn-out death spiral. There are rumours of changes to take place in the boardroom but we’ll have to wait and see if those take place.

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18 Responses to “Postcards from HK: Shares and Bears”

  • Art Watson says:

    I’ve said this before -“Mickey Mouse company run by complete Clowns”

    It’s a complete Shamble.

  • StevieW says:

    Dan Thanks for the information it almost looked like share dumping at the pace it was going earlier, get what you can and scarper. But as you say it seems to have steadied now.

    I await the 30th September like the aligning of all the planets, something will happen but what, we will have to wait and see.

    Also Good Luck with the book out there.

  • tttpaule says:

    The longer these idiots are around our Club the longer we will be stuck with Clark & the poor football we’ve had to watch since Houghton left. Unless we can stay up this season & hopefully get sold before next season the club will certainly be in meltdown ‘ no money to invest, lower gates & division 1 football. I would also find it unbelievable that anyone with half a brain would invest 24% into the club “no strings attached” the whole structure of the club has been wrecked under these useless sh*ts so they need to go before the damage they’ve caused becomes irreparable. Keep up the good work Dan kro.

  • chris says:

    Under FFP i understand each club in the Championship last season will have to submit their accounts for the period ending June 2014 to the Football League by November.
    They are only allowed to make a loss of £8 million if the owner can pay off £5 million of that debt, which won’t happen at Blues.
    Without owner subsidy of any debt the club can only run up debt of £3 million.
    Well Blues have lost roughly £10 million for the last 3 seasons, so will the loss be less than £3 million?
    What sanctions / fine will BCFC receive if they have broken the limits?
    How will BIHL and any sale be affected if we receive a sanction?

  • Chris W says:

    Just more doom and gloom, I can’t see the figures showing anything other than a substantial loss, if they are signed off at all.
    Unfortunately the only way to rid ourselves of these parasites is administration as no one in their right mind would invest in only 24% of BCFC without seeing some return, i.e. the purchase of controlling rights.

  • chris says:

    They may not have to sign off the official HKSE BIHL accounts but they do have to submit BCFC accounts to the Football League by November.
    Whether those accounts submitted to the FL will be made public i don’t know.

  • Bluenosegaz says:

    I agree with chris nobody in their right mind would put money into blues and not have a say in the club hate the thought of people losing jobs but the only way to rid these people will be administration.

  • StaffsBlue says:

    The only people likely to invest, with no prospect of a full purchase, will be more Chinese in the same circles as BIHL. I don’t see how Wray’s lot would even consider a deal under those conditions. Looks like BIHL will be our owners for the rest of the season… at least.

  • AJF says:

    I was under the impression that BIHL only wanted to sell in tranches because it meant that they could retain their HKSE listing status this way and it was worth a premium of approx. £20million.

    However if the share price has fallen so low and could fall further below the value of the football club it means the HKSE listing is worth less than the football club, or is possibly worthless.

    So what is the point in holding on now, the gambles have not worked. Time to sell in full?

    • almajir says:

      It’s not though – the listing is worth money regardless of the firm because as a shell it’s worth money, it’s cheaper than an IPO.

      • AJF says:

        I have worked out lunchtime from Bloomberg that 8.56% of the shares changed hands today and can also see that the share price fell 15%. In fact it is down more than 55% this year. So something is happening.

        In my view there is absolutely nothing to support the share price from a profit and dividend aspect and also future prospects. I expect it to fall further.

        Seems a bit exorbitant that an IPO or initial public offer would cost £20 million. There must be a stage where there is no point in continuing?

  • Blue Nose Gaz says:

    Never any good news with these owners in charge we don’t need multi millionaires just owners who actually care about the club and it’s supporters

  • andy says:

    The Apathy, the Resentment and Mocking visiting supporters look set to continue through another season unless some serious investor comes in.

  • tony jones says:

    what ever happened to the take over yeah right hoping to get season tickets sold after 51 years of supporting blues i have totally had enough what a friggin joke we are thanks carson hope you rot

  • bluenoserob says:

    If we are still losing millions even with our pathetic budget , how are we ever going to get back to having a half decent squad.I am starting to think that we are sliding towards oblivion.

  • chazk21 says:

    Dan, have you heard anything regarding Clark’s future in HK?

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