IQE price collapse? £30m invested in property, plant and equipment to stand still; Cash more than halved from £46m to £21m (cash call soon anyone?); £10m more costs being capitalised; Inventory and trade debtors up by £7.5m (how does that work when standing still?); Adjusted results £10m better than actual results (all those pesky legal fee’s, onerous lease provisions and share based payments excluded). Last years pesky adjustments - also £10m. The good news? ‘participation in a new £850,000 research project that aims to put the UK at the forefront of the next generation of millimetre wave wireless communications technology for 5G infrastructure’. More jam tomorrow. I will give IQE one more roll of the dice but I am not expecting any significant improvement to the share price this year. More likely a slow drift and a sharp drop if there is a cash call.
IQE price collapse? jd… Zan…spread bet ( IGE ) XXXX Thank you to both Jack and Zan it has helped me understand a little more. In you example jack the brother would have put a 500 pp position on ? and at some point the his 50 ,000 on account was not enough to keep it open ? And only after 4 months with a fall in price of approx 20 % I have had much larger falls then that i can not recall how much i was once down with EPO which i had kept for years , i am m up now. TUNG another which might come back if i just wait ( evidence of last week ) When i did think about SBs i found you could not SB on AIM shares , IG the largest choice of small caps , but not many.
IQE price collapse? Hi Zanshin, Indeed so. Other examples would result in very different outcomes & equal disaster for both brothers. I just wanted to offer a more cautionary tale for SBs in particular as that game needs far less funds to get started & it can appear highly seductive to many, including the less wary. Just another reason why so many more clients lose with leverage than with real shares. zanshin: The lesson here is obviously held within your tale, always pay close attention to your investments, whateverthey are and however they are held, and don’t take a “too big to fail” stance. Trust no-one. Much agree. IMO, such views can’t be emphasised enough. One thing I swear by is that as bad as things may seem with markets, they can always get far worse even if they improve again later. Even with supposedly solid FTSE 100 stocks. But get it wrong with leverage at a time of general decline &, unless hedging with short positions, a strategy that’s also far from risk-free, for every point that each of your stocks goes against you, paper losses soon snowball in a way that’s more damaging to a SB account than with real shares. Final point: one could of course uses stops with SBs as gospel, even if one doesn’t with real shares. But stops can be costly too as markets tend to sniff them out. Especially below support levels. I’ve been stopped out in the past below support levels at considerable cost only to see further dips, then a huge rally take place quickly. My losses could’ve been avoided. That happened with a couple of miners (ANTO & EVR). Latter also examples my past foolishness with leverage to even be trading stocks that are typically extremely volatile. Mistakes? Lord, I’ve made more than a few! But I’ve only ever got away with it with real shares. - Regards.
IQE price collapse? Hi JD, An interesting little tale, but just suppose the first brother had considered banks too risky to invest in after the 2008 debacle. Suppose he had considered the construction industry could offer potentially more return, with big juicy profits available for income, as well as potential capital gains. Looking at the list he might spot just the right candidate, a big company winning big government orders and a generous dividend, Carrillion perhaps? Lo, 2 years later, both brothers are drifting down the same creek with not a paddle in sight. The lesson here is obviously held within your tale, always pay close attention to your investments, whateverthey are and however they are held, and don’t take a “too big to fail” stance. Trust no-one.
IQE price collapse? Hi Ripley, Thanks. Glad to share my take, mindful that different folk have different views on this, as for most things. I can only speak from personal experience. Hence I’d never recommend anyone take up SBs, unless prepared to take significant losses before finding their way. Learning curve is much steeper. Errors are punished severely. In context, I remain profitable with real shares. But with SBs I’ve handed back every penny profit &, so far, a significant 5-figure sum besides. Like many people I’m not rich, nor poor. I don’t do this for fun. I was hoping to buy a home in a nicer area sooner, but not necessarily from SBs. But it’s saying something that instead of buying that home, at least I’ll avoid Skid Row. By now I’ve long known my limits with leverage. At a tangent, one scenario to highlight differences & perils between real shares & SBs. Two brothers come into £50K each inheritance in early 2016. They don’t really need to spend it just then, but as bank rates are low they look to invest for L/T. They both decide to try stock markets. One brother puts his £50K into real shares in HSBC at 525. His reasons: yield is VG & paid quarterly. SP already fell from well over 600 recently & support is below 525. His brother decides on SBs instead, but otherwise uses same logic, same entry level on HSBC. He stakes only 1% of his £50K. He assumes risking only 1% is sensible. In fact HSBC lost support. By 7th April 2016 it plunged to close at L/T lows of 416. Neither brother used stops, nor paid close attention to markets assuming HSBC couldn’t fall much further, but would recover. It did recover. Very well in fact, to levels of near 800 by 2018. The brother who bought real shares rode out the sharp falls in 2016, took his dividends & came away with a very handsome overall profit 2 years later. The brother who used SBs was taken out by April. He’d lost most of his £50K with no way back. PS: According to IG at least 79% of their SB clients leave as net losers. IMO, it’ll be higher as some have a good year or two & then also come away as losers. - Regards.
IQE price collapse? Thank you jackdawsson for sharing that . Sort of thing i think these boards should be about. I know you had some chats with “last call” back in November we swapped e-mails he was keen i should start spread betting . Good job i did not it appears from you message my real share acc is an addiction i have come to believe. Today was the first day of trying to do something to try and control that . I wish you all the best of luck going forward .
IQE price collapse? Hi Zanshin, Thanks. Your patience may yet be well rewarded. Whilst I think it might have more upside in this cycle & certainly so longer-term regardless of inevitable further dips, as you say, SBs carry a number of risks not applicable to real shares. If my hold wasn’t leveraged, there’s little question that I’d have stayed put for higher targets. I originally intended to sit for closer to 90. As it is, due to other longs elsewhere having very mixed fortunes, I’m having to do a balancing act regarding taking some gains to reduce pressure in maintaining other holds. An ever-present concern with SBs is that both collective gains & losses can snowball very quickly. With my longs in VOD back on the ropes (where I also hold real shares) & currently down to near 10-year lows of 135.08 seen 29th January after Moody’s downgrade today, one’s hand is rather forced to book almost anything. It’s been 8 years of spread-betting for me. I began 23/02/2011. If I had my time back I’d have opened a 2nd real share account instead. Getting involved with SBs has been by far my biggest & costliest error ever as regards market activities! - Regards.
IQE price collapse? Hi JD, Well done. Probably a wise move. A 20 to 25p rise in an upward leg seems to be about the limit IQE can achieve without profit takers (or something) causing a reversal, in the absence of stimulating news. I’ve managed a couple of small but profitable trades in the last few weeks, neither hitting highs or lows, but enough to keep adding to the coffers. No way do I consider this a long term hold, but with no stamp duty on trades, IQE offers good short term trading opportunities without having to take on the risk of spreadbetting. I’ve been waiting for a fall back to high 60’s to re-enter. Patience is required.
IQE price collapse? jackdawsson: Re-opened 4th long at 79.60. Maybe too early, but the trend here looks firmly back up & a revisit to much higher levels later seems far more likely than not. Closed 83.30. Reduced exposure here for a few more points as leveraged & mindful of a decent rise in recent days. Not least, as we know, it can drop back just as sharply on little volume. Frankly, only got involved with this for technical reasons & that alone is never a good enough reason to just hold. Still a long road to recovery for my remaining longs. For now I intend to ride it out, but will review new developments accordingly. - GLA.
Sweeneys valedictory on ADVFN Thanks shabby. Glad to learn that Dave KNOWS so much will happen in the future that’s good for shareholders. You know the reservations I have. Ultimately it’s profits and cash that support share prices, not talk. Maybe one day they will arrive for IQE in the kind of volume that makes someone other than Nelson and a chosen few rich. Investing should be about more than hope. Maybe Pullen’s appointment signals a change in management calibre that will lead to better results and a stronger balance sheet. I have never doubted the quality of IQE’s offerings but the Company has been too dependent on much bigger customers higher up the food chain who restrict IQE’s ability to price their products at levels high enough to book the profits and cash I refer to. I’ll say it again - Nelson’s personal greed is notable. His and other directors) shenanigans to disguise the fact they’d been selling shares was imv dishonest and a disgrace. My general feeling is that you’ll all do better when he’s gone (and taken a few others with him). There are much better investments out there without the risks all high-tech businesses carry. On a wider scale I got so fed up with directors lying about results and future prospects, whilst making themselves rich despite their failure to produce promised returns, that I now have only 3 investments in total (all in oil & gas, where there are no hiding places). Understand and choose them well and returns can be spectacular - as they have been for me. But there’s no denying the risks so my strategy wouldn’t suit most. GL shabby - you deserve to do well. Not sure about choosing IQE to get you that Gulfstream 600 but things might improve under different management. Always remember, cash is king. IQE doesn’t presently make any to speak of. Don’t listen to those who tell you the future is rosy. There have been too many rosy futures in the past and they’ve never arrived. If you’re going to fall in love, fall for profits (real ones, not pretend) and cash. Dave S should write a book (preferably on medicine - I think he said he was a doctor; he certainly knows very little about investing and the niceties of investment return). He’s the pied piper. Hope those who follow his music don’t find themselves all at sea… all imo/dyor
Post Close Trading Update Oh dear. “Adjusted, post exceptional items, ignoring anything else we don’t think should count (like closure costs and provision for onerous leases)” earnings are great, but we spent £25m more cash than we got in and we’ve had to go back to HSBC to ask for an increased borrowing facility of $35m. There’s good news though. It’s a revolving, multi currency facility and we haven’t drawn on it (yet). Don’t worry, everything’s going to be great from now on. No doubt IQE has a big Chinese customer base to even out its reliance on the likes of Apple… Can’t wait to see what net profit after tax (unadjusted) turns out to be (assuming it’s a profit). The p/e might give people vertigo… all imo/ dyor
IQE price collapse? Parochialism. Tidy.
IQE price collapse? Why is the nationality of the Directors relevant? What are you trying to imply?
IQE price collapse? Share prices are the result of supply and demand - nothing else. Fundamentals win in the end but these can only be judged sensibly when an investment produces a tangible return to shareholders. This is something IQE has never done and continues to show no signs of doing because it borrows too much and fails to generate sufficient cash because it is unable to charge the very few much bigger and more successful customers it supplies enough to do so. Until IQE starts generating profits that turn into cash and some of this is earmarked for shareholders, any investment in it is based on hope. “Hope” is not a valid investment strategy. As for IQE’s SP reaching 180p, it was talked up to this level by yet more bullish statements by Nelson, who had recently sold about £5m’s worth of his own shares before convincing subscribers to a placing that 140p was great value. Demand continue to exceed supply (perhaps people like you still believed the bullcaca? Someone must have been buying. Nelson has cashed in so many options whilst IQE has been under-performing in cash and profit terms it’s unreal. It’s always jam tomorrow and yet again this has turned out to be the case, albeit it’s one of IQE’s biggest customers’ failure to achieve targeted sales levels that have caused IQE’s latest failure to book the much vaunted future revenue and profits talked of in advance (yet again). Maybe next year, eh? If I disappeared when the SP was 180p it wasn’t intentional. I generally posted when results were announced and then stayed around a while dealing with all the abusive comments I got from people like you, aab. Perhaps I was concentrating on my shares in JOG and Serica, both of which have produced spectacular returns? Who knows or cares. I disagree with you generally about calling the situation correctly. Fwiw at today’s price of more than 70p, giving IQE a market cap of close to £600m, I regard IQE as significantly overvalued. Applying a p/e of 20, which is more than fair given IQE’s track record, will it be generating net profit after tax (I mean ‘net profit’ and not some made up number arrived at by adding back whichever expenses it chooses to get to “adjusted EBITDA” which is nonsense). I didn’t lose money on IQE - I just had money tied up in a dog for too long, because I made the mistake of believing all the cr*p spouted by Nelson about 3 months before announcing that an “overstocking issue affecting some customers” had caused difficulty. This sent the SP through the floor, where it stayed for about 2 years. From memory, I bought at about 23p/24p and sold at 26p/27p. I understood a lot more by the time I sold than I’d known when I bought, including all the tricks Nelson and his tame ex auditor and fellow Welsh directors were up to. As for boastful statements, I said what I did for a living, which is true. It should tell you I have some idea of what I’m talking about. I don’t happen to like greed and dishonesty. You seem to like clothes worn by emperors. Good luck. I don’t need any.
IQE price collapse? You have never called it right. If you had you would have made a veritable fortune. Instead you witter on about what you have achieved in business and your success in the markets as if any of us are interested or more importantly believe your boastful statements. All you have ever done is castigate the directors and give them credit for virtually nothing. You disappeared when the price reached 1.80 because that was something you never predicted in your wildest dreams and now here you are yet again with your I told you so nonsense. Move on you lost money on IQE nobody really cares? You really do need to get a life.