Thread by @MylesMcNulty

To expand on my thoughts re: #ESL:

Friday's news was great. The commentary from many on Twitter was not.

Everything in the RNS has been in the public domain for 6 months - except on thing: ESL has been granted an extra 6 months to become an investing Co or complete an RTO. 1/9

https://twitter.com/MylesMcNulty/status/1258691327035916288

That was the only item of 'new' news.

The reaction on Friday, and indeed the drop in the SP this AM, is indicative of the absence of research being carried out on even the most basic of levels by many investors. It is worrying that many don't really know what they're holding 2/9

With regard to #ESL itself - DBAY essentially acquired a controlling 51% stake in the operations (at subsid. level) for £55m. This values the business at £108m, and ESL's 49% stake at £53m, or 14.0p per share.

Now, a discount should be incorporated into the value of ESL's... 3/9

...stake, as we must account for i) the future dilution to the stake incurred by the PIK interest due to DBAY, and ii) the non-controlling nature of the holding.

Conversely, we could argue that there should now be a premium attributed to it: firstly, the DBAY funding price...4/9

...was at an EXTREME discount to pre-suspension levels. It was rescue funding, and DBAY had #ESL at its mercy.

Secondly, as I have tweeted about in the past, through a combo of massive grocery volumes and v low fuel prices, business should be very strong ATM. 5/9

Last month, Adrian Collins joined #ESL as chairman. He is a genuine industry heavyweight in UK investment management. Just look at his CV.

Now. Would he have taken the position if there was a chance that the Co would be delisted only 8 weeks after he joined? Of course not. 6/9

He'd have sought assurances from regulators that he'd get a 6 month extension to either raise £6m+ and become an investing company, or else carry out an RTO.

Given his background, I think the former will be his preference. He now has 7 months to raise it - a lifetime on AIM. 7/9

Ultimately, IMO the 49% stake in the Eddie ops will be sold to DBAY too. It could even be partially disposed of, to raise the £6m minimum cash requirement to become an IC. This would obviously negate the need for a placing, and leave #ESL with a meaningful holding in Eddie. 8/9

DBAY and the new team at Eddie have a track record of success: the environment is favourable now (high volumes from customers and low fuel prices) to turn the business around.

Meanwhile, #ESL's heavyweight chair will be able to plot a new course for the Co and its investors. 9/9