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Edge Update: another ShareSoc success

This article represents the views of its author and not necessarily those of ShareSoc.

Due to the Board’s desperate desire to get rid of the I Class, they have sold the main H class asset ahead of their expected timetable under pressure from members of the ShareSoc Edge Performance VCT Campaign

https://www.investegate.co.uk/edge-performance-vct–edgh-/rns/sale-of-unity-shares/202111181535248758S/

The Board is pleased to announce that the Company has realised approximately 90% of its holding in Unity Software Inc (Unity) for £10.9m in cash at an average price per share of £144.

Valuing the Company’s remaining Unity shareholding at yesterday’s closing price, this represents a 20X return on initial investment.

This has significantly reduced the Company’s exposure to this stock, although the Company has retained 10% of its holding as at 31 August in Unity Software Inc.  The Investment Manager is confident that it can identify suitable attractive opportunities to invest these cash proceeds in accordance with the Company’s investment policy.

Since 18 Nov the Unity stock price has fallen dramatically. Last night it was $151.68 with an e/r of 1.329 or £114/share. (Whilst I could congratulate the Edge Board on its splendid timing, I however comment that the sale date was more driven by other motives and the splendid timing was a coincidence, in my opinion!)

So not only has our action locked in an extra £2.3m of cash but it has made the fund highly liquid and ripe for winding up. Apart from £13m of cash, the remaining non cash portfolio is just an £800k stake in Unity, a £3m stake in AIM quoted Audioboom, a £500k stake in AIM quoted Mirriad which could all be liquidated in days and a £2.5m stake in 3 unquoted companies that can be put into run-off.

My back of an envelope calculation says that there is £17.3m of near cash or 149p /share that can be returned subject to reserves availability and a further 21p/share that can eventually be realised and returned by a liquidator after the 5 year holding period for the last 1m H class shares issued in April 2018. This will require some finessing of the  performance fee double count.

See also https://www.investegate.co.uk/edge-performance-vct–edgh-/rns/issue-of-equity/201804061716511806K/

The Company announces that, pursuant to the Company’s top-up offer for subscription of H Shares of 10 pence each in the Company, on 5 April 2018 the Company allotted and issued 1,069,446 New H Shares of 10p each in the capital of the Company (“New H Shares”).

Cliff Weight, ShareSoc Director and one of the leaders of the ShareSoc Edge VCT Campaign.

DISCLOSURE: I own shares in Edge. I did not before the campaign started. I bought some so that I was aligned with other shareholders and had some skin in the game.

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