FastForward share price soars to multiple of NAV – what are they smoking? FastForward announced its interim results on 28 December which showed that its NAV at the end of September 2017 was 9.18p. Jim Mellon, the chairman, said “While our continued premium to net asset value suggests that our investor base still sees our portfolio as having exciting long term potential, we are also conscious that, like many AIM companies, the liquidity of our shares can be tight. Therefore, and again as promised by your board, we have decided to instigate a buyback process which both improves liquidity and, we believe, enhances returns for longer term shareholders.” NB: Buying back shares at a premium destroys value for ongoing shareholders.
On a positive note, the chairman said “The period since the period end to the date of publication of these financial statements has been one of great activity for the Company and a number of investee companies and we go into 2018 with real optimism that our shareholders will see significant value creation through our investment strategy. Nuuvera, our largest investment is about to go public in Canada and the omens are good. We have several other investments that look very promising and I am confident of further progress for your company in the period ahead.”
On 2 January 2018, FastForward confirmed that Nuuvera’s deal with Mira IX was going ahead on the terms that had been disclosed previously.
Between 29 December 2017 and 3 January 2017 FastForward’s shares rose from 14.375p to 23.6p and today they stand at 25.25p or 2.76x FastForward’s last reported NAV. Nuuvera’s Canadian listing has been delayed until tomorrow (9 January 2018). Its price will have to rise substantially to justify FastForward’s share price move.
Update 11 January
Based on a closing price of C$6.85 for Nuuvera (well up on its C$2.50 IPO price) FFWD’s stake in the company is, we think, worth about 9.2p per share, up from 3.9p at end September. That would make the NAV around 14.7p, putting FFWD on a 38% premium at the current share price of 20.28p.
FFWD : FastForward share price soars to multiple of NAV