Good morning!

In case you missed it yesterday, Graham kindly emailed me some new sections on financial sector companies (which he covers, but I don't). So yesterday's report now includes sections on Lighthouse (LON:LGT) and NCC (LON:NCC) . If you wish, you can revisit yesterday's report here.

On to today's results & trading updates.


32Red (LON:TTR) - takeover bid - this looks a done deal, as management has agreed a bid of 196p cash + 4p dividend. Since management owns 43.3% of the company, and has agreement from holders of a further 27.8%, then it's a done deal.

The premium is only 16.3% to yesterday's closing price, which doesn't sound good. However, the share price had been trending upwards beforehand. Possibly driven by insider dealing? Or it could just have been because of the fairly good trading update on 1 Feb 2017 - which does coincide with the price starting to move up, so it looks alright.

Prior to the most recent trading update, the share price was around 130p, so an exit at 200p (including an imminent divi) looks a decent outcome.

Where management have big personal shareholdings, this acts as a bulwark against opportunistic, under-priced bids. So in this case I think holders have to accept that management must have secured the best possible price, given that they own 43.3% of the company.

Online gambling companies don't tend to attract big ratings, because the customer churn is pretty nasty. So they have to constantly spend heavily on marketing to recruit new players. That's the reason I rarely invest in this sector. Plus there are regulatory risks too, due to the addictive nature of gambling, and that it is essentially all about fleecing stupid people - by providing them with games where the odds are against them. Poker sites being the exception, where considerable skill is involved, to become a good & profitable player.

Anyway, there we go, we'll be waving a tearful goodbye to TTR in due course. Well done to holders of this stock.


Treatt (LON:TET)

Share price: 314p (up 20.8% today)
No. shares: 51.8m
Market cap: £162.7m

(at the time of writing, I hold a long position in this share)

Trading update - this seems to be an unscheduled update, as…

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