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Burford Capital Limited (BUR)

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simoan
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Re: Burford Capital Limited (BUR)

#242966

Postby simoan » August 9th, 2019, 10:15 am

JoyofBrex8889 wrote:Their short position was disclosed publically before the alleged trash and cash so no foul. Muddy Waters have played a blinder. Well done them.

And shame on Burford. Their questionable corporate governance is really what opened the door to this raid.

No-one has said any different. Have you not read the whole thread, or do you just like re-iterating what others have already written?

JoyofBrex8889
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Re: Burford Capital Limited (BUR)

#242968

Postby JoyofBrex8889 » August 9th, 2019, 10:21 am

Nope but I just spent an interesting hour with this document, trying to see any breach, and struggled to find anything that would trouble MW. You say MW will “have their trousers pulled down in court”. My question is: On what grounds? What law have they broken, exactly?

https://eur-lex.europa.eu/legal-content ... 22&from=EN

Could it be that not only have I read the thread, but also the background EU legislation as well?
Last edited by JoyofBrex8889 on August 9th, 2019, 10:31 am, edited 2 times in total.

simoan
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Re: Burford Capital Limited (BUR)

#242971

Postby simoan » August 9th, 2019, 10:29 am

JoyofBrex8889 wrote:Nope but I just spent an interesting hour with this document, trying to see any breach, and struggled to find anything that would trouble MW. You say MW will “have their trousers pulled down in court”. My question is: On what grounds? What law have they broken, exactly?

https://eur-lex.europa.eu/legal-content ... 22&from=EN

Well, I hope you haven't been further wasting your time. Burford is registered in Guernsey and I believe The Channel Islands are not in The European Union.

And for the record, I made it quite clear I am not a lawyer and said their is a chance they could have "their trousers pulled down", not a certainty. I also made it clear elsewhere in the thread that I hope management concern themselves with more important things than this sideshow.

Si

JoyofBrex8889
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Re: Burford Capital Limited (BUR)

#242975

Postby JoyofBrex8889 » August 9th, 2019, 10:42 am

simoan wrote:
JoyofBrex8889 wrote:Nope but I just spent an interesting hour with this document, trying to see any breach, and struggled to find anything that would trouble MW. You say MW will “have their trousers pulled down in court”. My question is: On what grounds? What law have they broken, exactly?

https://eur-lex.europa.eu/legal-content ... 22&from=EN

Well, I hope you haven't been further wasting your time. Burford is registered in Guernsey and I believe The Channel Islands are not in The European Union.


So let’s look at those?

http://www.guernseylegalresources.gg/CH ... =71521&p=0

Section 38A. Page 111. Pretty much a cut and paste of the EU regs.

Nothing troubling there, surely.

simoan
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Re: Burford Capital Limited (BUR)

#242978

Postby simoan » August 9th, 2019, 10:50 am

JoyofBrex8889 wrote:
simoan wrote:
JoyofBrex8889 wrote:Nope but I just spent an interesting hour with this document, trying to see any breach, and struggled to find anything that would trouble MW. You say MW will “have their trousers pulled down in court”. My question is: On what grounds? What law have they broken, exactly?

https://eur-lex.europa.eu/legal-content ... 22&from=EN

Well, I hope you haven't been further wasting your time. Burford is registered in Guernsey and I believe The Channel Islands are not in The European Union.


So let’s look at those?

http://www.guernseylegalresources.gg/CH ... =71521&p=0

Section 38A. Page 111. Pretty much a cut and paste of the EU regs.

Nothing troubling there, surely.

Burford are litigation specialists. I would be amazed if any case was not bought through the US judicial system. Who on earth would choose the EU or Guernsey for such a case? Especially when both sides are essentially US entities.

Anyway, I'm going to sign out here as the thread has gone off the rails somewhat.

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Re: Burford Capital Limited (BUR)

#243015

Postby Bouleversee » August 9th, 2019, 12:15 pm

Alaric wrote:
simoan wrote: They know if they throw enough dirt 99% will miss the target and they only need 1% to stick to make the exercise worthwhile.


What is apparent is that Burford are booking profits from litigation that's still in progress and where the outcome is uncertain. I know that accounting rules permit this and that's why accounts can sometimes be regarded as a work of fiction in terms of establishing whether a business really is making money.

The rules apparently require them to "mark to market" cases in progress. That shouldn't stop them from putting a contingency reserve against the expected receipts to defer profit until actual settlement.


It seems to me that if anything good comes out of this, the law will be changed so that profits can't be booked till they have been received. I thought that was already the case and that was what had happened at Tesco but presumably I am wrong about that.

It gives me pause for thought about switching to investment trusts in the belief that the managers would make a better job of managing my investments than I can. If the great Woodford can make such poor investment choices and others are little or no better, what is the point?

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Re: Burford Capital Limited (BUR)

#243019

Postby Alaric » August 9th, 2019, 12:29 pm

Bouleversee wrote:It seems to me that if anything good comes out of this, the law will be changed so that profits can't be booked till they have been received.


The keyword is "Revenue Recognition".
https://en.wikipedia.org/wiki/Revenue_recognition

As a wiki article, it may not be completely correct, but it does make the point that reporting revenue can be delayed if the outcome is uncertain.

The completed-contract method should be used only if percentage-of-completion is not applicable or the contract involves extremely high risks. Under this method, revenues, costs, and gross profit are recognized only after the project is fully completed.

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Re: Burford Capital Limited (BUR)

#243022

Postby Dod101 » August 9th, 2019, 12:44 pm

Bouleversee wrote:
Alaric wrote:
simoan wrote: They know if they throw enough dirt 99% will miss the target and they only need 1% to stick to make the exercise worthwhile.


What is apparent is that Burford are booking profits from litigation that's still in progress and where the outcome is uncertain. I know that accounting rules permit this and that's why accounts can sometimes be regarded as a work of fiction in terms of establishing whether a business really is making money.

The rules apparently require them to "mark to market" cases in progress. That shouldn't stop them from putting a contingency reserve against the expected receipts to defer profit until actual settlement.


It seems to me that if anything good comes out of this, the law will be changed so that profits can't be booked till they have been received. I thought that was already the case and that was what had happened at Tesco but presumably I am wrong about that.


That sort of thing is what brings down contractors. Anyone dealing with multi year contracts has got to make a judgement or tie up a very large amount of working capital in individual contracts (or in Burford's case, in individual cases)

I read somewhere that of course there is no market to 'mark' the cases against, so it comes down to the judgement of the Directors and for them to convince their Auditors, leaving plenty of scope for very subjective judgements.

I have found nothing in all of this to give me any encouragement to buy Burford, irrespective of what happens to the share price (which I see is over £8 at the time of writing this)

Dod

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Re: Burford Capital Limited (BUR)

#243194

Postby simoan » August 10th, 2019, 9:09 am

Always interesting to look at short tracker in these situations: https://shorttracker.co.uk/company/GG00B4L84979/

It looks like Muddy Waters started shorting on Monday, reduced on Tuesday before the report was released on Wednesday at 9am BST, and were out by Thursday. Nice work, but if that isn't market manipulation, I don't know what is.

Even now Burford is hardly the most shorted share on the UK market, although rumour has it Gotham are going to have a go this coming week.

All the best, Si

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Re: Burford Capital Limited (BUR)

#243218

Postby Bouleversee » August 10th, 2019, 10:16 am

simoan wrote:Always interesting to look at short tracker in these situations: https://shorttracker.co.uk/company/GG00B4L84979/

It looks like Muddy Waters started shorting on Monday, reduced on Tuesday before the report was released on Wednesday at 9am BST, and were out by Thursday. Nice work, but if that isn't market manipulation, I don't know what is.

Even now Burford is hardly the most shorted share on the UK market, although rumour has it Gotham are going to have a go this coming week.

All the best, Si


And all accomplished by an innocent tweet. :lol:

PinkDalek
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Re: Burford Capital Limited (BUR)

#243651

Postby PinkDalek » August 12th, 2019, 1:14 am

simoan wrote:Even now Burford is hardly the most shorted share on the UK market, although rumour has it Gotham are going to have a go this coming week.


I think I saw Tom Winnifrith saying that was likely to happen.

This might be Gotham’s comments (to date):

https://www.scribd.com/document/4214881 ... tice-FINAL

At three pages only, I’m unsure if that is the entirety but there is little new in there.

simoan
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Re: Burford Capital Limited (BUR)

#243657

Postby simoan » August 12th, 2019, 7:32 am

PinkDalek wrote:
simoan wrote:Even now Burford is hardly the most shorted share on the UK market, although rumour has it Gotham are going to have a go this coming week.


I think I saw Tom Winnifrith saying that was likely to happen.

This might be Gotham’s comments (to date):

https://www.scribd.com/document/4214881 ... tice-FINAL

At three pages only, I’m unsure if that is the entirety but there is little new in there.

Thanks, PD. Yes, I read the Gotham notes yesterday. Very interesting that they never went ahead with a short position despite their own analysis of Burford several months ago. What does that tell us? Perhaps they save their firepower for obvious frauds only these days but they probably decided risk/reward was not good enough.

Meanwhile, it looks like Burford are still trying to pin the tail on the donkey and have appointed legal firms to go after MW: https://www.investegate.co.uk/burford-c ... 00046828I/

Interesting RNS about the price manipulation that went on last week. I wish they'd just get on with business and address some of the valid points about the fair value accounting that MW raised in their report. I can't convince myself one way or the other on the accounting treatment and so will probably take the loss and move on.

All the best, Si

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Re: Burford Capital Limited (BUR)

#243732

Postby gbjbaanb » August 12th, 2019, 12:34 pm

Yes, Burford does seem to suggest dodgy stuff was going on:

From Investing.com

Note that MW didn't name the company they were going to release the report on until Wednesday.

In its statement, Burford said that in the hours after Muddy Waters’ initial tweet [on Tuesday], almost 90 million pounds ($109 million) of sell orders in its shares were placed and canceled without being filled, for a stock whose average daily volume is less than a fifth of that amount. It also released a detailed breakdown of trading activity showing that only a small proportion of sell orders that were created were actually executed, with most being canceled.

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Re: Burford Capital Limited (BUR)

#243758

Postby Alaric » August 12th, 2019, 2:02 pm

simoan wrote:
Interesting RNS about the price manipulation that went on last week. I wish they'd just get on with business and address some of the valid points about the fair value accounting that MW raised in their report. I can't convince myself one way or the other on the accounting treatment and so will probably take the loss and move on.


I suppose it's a trader's paradise at the moment, down 9.35% so far today. But I suspect longer term investors don't know what it's really worth either.

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Re: Burford Capital Limited (BUR)

#244315

Postby TheMotorcycleBoy » August 14th, 2019, 5:18 pm


PinkDalek
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Re: Burford Capital Limited (BUR)

#244339

Postby PinkDalek » August 14th, 2019, 6:54 pm

TheMotorcycleBoy wrote:FCA now investigating:
https://www.independent.co.uk/news/busi ... 54381.html


Yes, that was in the press back on Monday but I've failed to spot anything at the FCA website, although they've been quoted extensively. Since then Muddy Waters has shared the dossier with the FCA and ... :

https://www.thisismoney.co.uk/money/markets/article-7354113/Hedge-fund-Muddy-Waters-demands-FCA-probe-Burford.html

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Re: Burford Capital Limited (BUR)

#244346

Postby stevensfo » August 14th, 2019, 8:01 pm

PinkDalek wrote:
TheMotorcycleBoy wrote:FCA now investigating:
https://www.independent.co.uk/news/busi ... 54381.html


Yes, that was in the press back on Monday but I've failed to spot anything at the FCA website, although they've been quoted extensively. Since then Muddy Waters has shared the dossier with the FCA and ... :

https://www.thisismoney.co.uk/money/markets/article-7354113/Hedge-fund-Muddy-Waters-demands-FCA-probe-Burford.html


Crikey, it's like having young M.Waters and young Burford at the back of a classroom in a Primary school.

I think the first comment on thisismoney.co.uk pretty much summed it up with '
Good luck getting the FCA to investigate anything'.


No doubt, they will apply due diligence, examine the arguments, weigh up the evidence..... then wait and see what the tabloids say. ;)

Steve

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Re: Burford Capital Limited (BUR)

#244363

Postby Alaric » August 14th, 2019, 9:56 pm

stevensfo wrote:Crikey, it's like having young M.Waters and young Burford at the back of a classroom in a Primary school.


It is rather.

It's now clear, if it wasn't before, that Burford's stated profitability relies on a handful of "large" cases going well and also that it reports profits as real when they are still speculative because the litigation is unresolved.

It's not the mirror image of the indemnity insurers of those who Burford would take cases against, that if their accounting was prudent, they would set aside provisions for claim settlement and only release them if the claim was successfully defended or they were able to settle for less than the provisions.

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Re: Burford Capital Limited (BUR)

#244409

Postby TheMotorcycleBoy » August 15th, 2019, 6:34 am

Alaric wrote:
stevensfo wrote:Crikey, it's like having young M.Waters and young Burford at the back of a classroom in a Primary school.


It is rather.

It's now clear, if it wasn't before, that Burford's stated profitability relies on a handful of "large" cases going well and also that it reports profits as real when they are still speculative because the litigation is unresolved.

It's not the mirror image of the indemnity insurers of those who Burford would take cases against, that if their accounting was prudent, they would set aside provisions for claim settlement and only release them if the claim was successfully defended or they were able to settle for less than the provisions.

I'm not sure it's that clear. They provide finance not legal services as such. So surely they can book revenue once the legal team (who I believe will be from different firms) they have financed have committed to that finance?

Yes I have a BUR position. I've have profited from selling on their shares in the past. Just wish I'd not listened as hard to the LTBH people on here as much, then I'd still be quids in, as I would probably have sold another chunk on earlier this year!!! :roll: :lol: A bird in the hand etc. etc.

My current holding has a book value of £1980, and a market value (now) of about £1000. I may attempt to sell about half of it today.

Matt

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Re: Burford Capital Limited (BUR)

#244420

Postby Alaric » August 15th, 2019, 7:54 am

TheMotorcycleBoy wrote:I'm not sure it's that clear. They provide finance not legal services as such. So surely they can book revenue once the legal team (who I believe will be from different firms) they have financed have committed to that finance?


The impression I had of their business is that they "buy in" the rights to pursue legal cases. If you are a Company with a legal dispute, you might get a settlement of 4 million or you might get a settlement of nothing. In effect you sell the case to Burford for 2 million who then pocket the 4 million if they win.


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