Powerhouse Ventures Limited

ASX:PVL

Powerhouse Ventures Limited

ASX:PVL
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$0.080 (0%)
Last close price
#50
Rank
8
Held by
23
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Reports (2) My Report Forum Investors
Forum Topics PVL PVL Value on Offer?

Pinned straw:
TEPCapital
Added one year ago

At 4.5c, PVL has a market cap of A$5.43M.

The company has cash of A$3.2M, and minimal operating cash burn.

If one values the cash fully, then the portfolio (ex-cash) is being recognized at just A$2.23M, by Mr Market (i.e. A$5.43M market cap minus A$3.2M cash).

Yet, the company has a reported portfolio value (ex-cash) of ~A$7.59M, based on major independent pricing events (i.e. raises involving other VC funds or 3rd parties).

In other words, the market is treating the PVL portfolio (ex-cash) at a discount of ~70% (e.g. [A$7.59M - A$2.23M] / A$7.59M).

And yet, 4 of the top 5 positions (Cirrus, Skykraft, Ferronova, Inhibit) have been through major pricing events (i.e. increased in value) across the past 24 months and the other has held its value (Urbix).

In contrast to the share price, the portfolio companies are performing - NTA has increased from 7c to 8.9c across the past 18 months.

Time will tell whether Mr Market is being erratic or not.
NewbieHK
Added one year ago

It’s really an early stage BTI (Bailador). For those with a higher risk tolerance and willing to sit back and wait for the various funding rounds to proceed there looks to be an opportunity. So in effect it’s real venture capital investing.

Using BTI as a comparison it seems the cash is what the business is being valued at with the unlisted investments at this stage making small impacts on the overall price. With BTI you are basically getting the unlisted holdings for free with the valuation covering cash and listed shares.

It’s possible that until PVL gets its first public listed investment it might be slow progress as it cycles in and out of unlisted opportunities slowly increasing its cash reserves.

However, it may only take one of its investments to public list at a significant premium for this to pop!

Held: IRL (to scratch the VC itch)

19
Slideup
Added one year ago

@TEPCapital do you have any thoughts on what is likely to happen beyond Dec 23, as my understanding is that all of the options that were granted in leu of salary to the directors and leadership team will expire out of the money. Do you think they are likely to keep taking their salary as options or will opex costs increase dramatically in 2024 as everyone wants a salary again. Working for 2 years without a payback must be a tough pill for some of these guys.

it definitely appears undervalued but I don’t really see a catalyst to change that in the near term.

21
stevegreenycom
Added one year ago

I look at a bit like @Slideup in some ways. That is @TEPCapital , when you say "minimal operating cash burn", I see where you are coming from there are signs of that in an absolute value sense. The concern is though, expenses as a percentage of their asset base when you think of it that way are not so "minimal". Can see some tempting aspects here but it's this that is a little off-putting, would be much less of an issue if they had closer to $50 million assets they were looking after.

17
stevegreenycom
Added one year ago

Seems like a good summary to me @TEPCapital of the points around scale of the company, potential future catalysts, control and the board's thinking etc. I haven't looked at this all that closely to be honest. Although the issues around these sort of points I have had a bit of a look and agree with you there.

Where I can't add any value though at this stage to the discussion is the main factor about where these top holdings are headed and when they may be able to offload them at a good price etc. At the end of the day if you are confident there and get that call right you should be rewarded with plenty of upside eventually.

16
UlladullaDave
Added one year ago

It's too small really. You could halve the discount tomorrow morning by buying $30k of stock and then send it back to where it is in the afternoon when you try and get back out....

Without a specific catalyst that closes the gap this could trade like this for years. I have no knowledge of the underlying assets and given the size and free float/liquidity it's just not really worth my time trying to find out. I suspect that is the mentality of most people who look at it.

Out of curiosity, how did they spend $60k on travel?

11