Market's view on Seed Innov
Published on April 2024
- SEED Innovations Ltd has received the remaining circa £2.4m from the sale of its portfolio company Fralis LLC, trading as Leap Gaming, marking the second tranche of the total €5.8 million sale, enhancing SEED’s strong cash position, which is now over £6m, surpassing its market capitalisation.
- The CEO of SEED Innovations, Ed McDermott, expressed confidence in the company’s financial strength and hinted at upcoming strategic initiatives aimed at increasing shareholder value.
- Criticisms include SEED’s fund management expenses exceeding 12% of the fund value at one point and the company being described as run more for the benefit of the board rather than shareholders.
- SEED’s shares are restricted from dealing on the AJ Bell platform, causing concern among potential buyers.
- Observations were made that SEED holds more cash than investments, suggesting a cautious or unbalanced investment strategy.
- Comments on past management decisions question the skill level, highlighting poor investment choices and financial decline, with one investment decreasing from £600k to just £13k.
- SEED Innovations is recognized for consistently reducing its net asset value (NAV) year after year, with a current NAV that is lower than it was almost eight years ago.
- The stock’s performance is noted to have not significantly improved despite buybacks, with a current NAV barely reaching 6p.
- SEED’s cash position and the value of cash receivables as of September 30, 2023, are £7.1 million, which is noted as a strong point for capitalising on future investments.
- Some stock watchers remain skeptical, foreseeing that it would take a significant event to improve the company’s market performance.