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The Topicus thing really confused me too. Luckily I hold this in a TFSA but I'm still curious how to think of it from a % return standpoint.

They seem to be in limbo in my trading account. How many Topicus shares were given for each share of CSU ?
 

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The Topicus thing really confused me too. Luckily I hold this in a TFSA but I'm still curious how to think of it from a % return standpoint.

They seem to be in limbo in my trading account. How many Topicus shares were given for each share of CSU ?
In connection with the completion of the Spin-Out Transactions, on January 4, 2021, all of Constellation’s common shareholders of record on December 28, 2020 received, by way of a dividend-in-kind, 1.859817814 subordinate voting shares of Topicus.com (the “Spin-Out Shares”) for each common share of Constellation held.
(I even made some free money from being on the right side of the rounding. No fractional shares.)

I think 0 ACB on the free Topicus shares is the right way to report it.

To me, though, I want to track how my initial investment in CSU performed. So if I have 100 shares of CSU which gave me 186 shares of TOI, I'll track my CSU performance as a combination of my CSU position and my position on those 186 TOI shares. Seems a bit complex though. Even more complex if ever I start buying TOI shares.

And what if you start buying TOI shares afterwards? Your ACB will stay low simply due to those free shares. And how will you track the performance of TOI?

Seems like the performance of TOI will have to be split in two stages. Free shares vs bought shares.
 

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I'll track my CSU performance as a combination of my CSU position and my position on those 186 TOI shares. Seems a bit complex though
Definitely is complex, I agree.

Each CSU share is supposed to get 1.86 Topicus shares, right?

I just realized that I'm not even seeing the Topicus value in my account yet. Wow. This means my growth/momentum portfolio is performing even better than I realized because I've been looking at the value with Topicus stuck at $0

Do we have a rough idea what the share price will be? I'm seeing bid/ask around $71. Is it really that high?
 

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Definitely is complex, I agree.

Each CSU share is supposed to get 1.86 Topicus shares, right?

I just realized that I'm not even seeing the Topicus value in my account yet. Wow. This means my growth/momentum portfolio is performing even better than I realized because I've been looking at the value with Topicus stuck at $0

Do we have a rough idea what the share price will be? I'm seeing bid/ask around $71. Is it really that high?
It was supposed to start trading today but it has been pushed to tomorrow. That's why it's still at 0.

I see $68 so I guess your $71 is about right. Not sure it should be traded at that price though... CSU is trading around $1600. If it gave 1.86 shares valued at $70 each that's $130. And that $130 added to $1600 means about +8%. Giving those shares didn't affect CSU, or it's blended in its volatility. I think the shares should be worth below $10 (below +1%), but I certainly wouldn't complain on that +8%. Maybe it'll start high and drop fast, like some IPO euphoria.
 
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Wow it currently really is trading at $65...

We'll see how long it lasts. If it's sustainable then that's really amazing because that's a +8% to my biggest investment (CSU is my top holding).
 

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No idea where the shares will stabilize. Maybe this was impatient of me, but I sold my Topicus shares at 64.10 to treat it like a 'cash' dividend.

This is like a 7% boost to my overall CSU position, using the share count I got. I consider that a pretty significant increase to the "total return" position and I'd rather take it as guaranteed cash. This is part of my growth portfolio, and this value will be redeployed to something other than TOI.

For me, it's a question of liquidating now or liquidating within 6 months. I chose now, plus this makes my tracking easier; it's just like a cash dividend for me at this point.

My growth portfolio is now up 20% versus the summer, versus 14% for my XIC benchmark.
 

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No idea where the shares will stabilize. Maybe this was impatient of me, but I sold my Topicus shares at 64.10 to treat it like a 'cash' dividend.

This is like a 7% boost to my overall CSU position, using the share count I got. I consider that a pretty significant increase to the "total return" position and I'd rather take it as guaranteed cash. This is part of my growth portfolio, and this value will be redeployed to something other than TOI.

For me, it's a question of liquidating now or liquidating within 6 months. I chose now, plus this makes my tracking easier; it's just like a cash dividend for me at this point.

My growth portfolio is now up 20% versus the summer, versus 14% for my XIC benchmark.
Yes, I think it's a good decision.

In fact, I have no clue if there is a better decision at the moment.

I decided to hold it because I'm curious how a spin out of CSU will perform, since CSU has one of the top management teams in the world and I'm curious how TOI will do.

CSU is holding 1 Super Voting Share of Topicus, representing 50.1% voting power, so CSU will have their say.
 

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I have 6 shares of CSU in my non-registered account and now also have 10 shares of topicus..

I have 4 shares of CSU in my TFSA and have no additional Topicus shares.

is this correct? I thought I would have 6 shares of topicus in the tfsa
 

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This is an interesting article.. here is an excerpt..

“The plan to create a publicly listed operating group made up of Topicus and TSS was a key part of our discussions with the Topicus founders. They didn’t want their legacy disappearing into the craw of an omnivorous conglomerate. While they knew that Topicus would have autonomy within Constellation, they also wanted identity. The public listing is expected to afford our Netherlands-based businesses a platform from which to celebrate their culture and achievements.”

– Constellation press release – May 20, 2020
 

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from above article...

“In May 2020, Constellation’s subsidiary TSS acquired Netherlands-based Topicus.com BV (I’ll call the pre-merger Old Topicus) with a plan to seek a separate listing of the combined companies which would be named Topicus.com. Constellation had originally planned to complete the spin-off by November 2020, but for undisclosed reasons has delayed it to a future date.
The stock will be dual-listed in the Netherlands and on the TSX Venture exchange. The total purchase price is valued at EUR 217.4m with TSS paying EUR 133.6m and IJssel (the seller) buying 9% of TSS for EUR 83.8m. IJssel will also commit an additional EUR 27.6m loan to TSS. The debt required to finance the deal will be funded entirely at the TSS-level without recourse to Constellation Software.”

So CSU bought old topicus for 217.4M euro
TSS was valued at (9%=83.3M = 925.5M euro)
217.4 + 925.5 = 1.142 Billion euro

1.142b x 1.54 = 1.759 Billion

Topicus market cap 2.583 Billion = 46% value increase

This is back of napkin - might be incorrect.
 

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I have 6 shares of CSU in my non-registered account and now also have 10 shares of topicus..

I have 4 shares of CSU in my TFSA and have no additional Topicus shares.

is this correct? I thought I would have 6 shares of topicus in the tfsa
Hmm sounds weird.

6 x 1.86 = 11
4 x 1.86 = 7

I would expect you to have those shares.

I'm also wondering how it worked out for those holding XIT...
 

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This spinout was even more complex than I realized at first. The spinout TOI shares were assigned a fair market value of $0.0001 at the time of distribution, so all index providers saw the spinout as negligible, just about zero value. Then only after the pay date, another entity did the TOI acquisition, which bounced the share value up to $66. So the corporation(s) structured this spinout and buyout in a weird way.

TOI really was initially worth close to zero, on paper. The acquisition which boosted the share value was dependent on the spinout occurring successfully. So this wasn't just a ticker price glitch... first it was worthless. Then the acquisition fully completed. If that acquisition had not occurred, TOI would still be closer to $0 today.

This is also why TOI ended up on Venture! It didn't have a high enough share price/market cap to be listed on the TSX. Today of course it's absolutely huge at $2.3 billion, so it's kind of funny that it's on Venture.

There are several weird consequences of this, according to a proprietary Bay Street note I've seen. Apparently XIT is going to outperform its benchmark index, because the index ignored the TOI value. It seems that all the indexes ignored TOI because of its near zero valuation at dividend time.

Something that really might be of consequence. The proprietary note I read said that derivative-based synthetic index positions, like the Horizons ETFs, actually miss out on the TOI value because the index doesn't track it! So the Horizon ETF will track the index (because there is a swap which is a contract to track the index), but the index itself missed out on TOI due to a quirk in how they value spinoffs and dividends. Meanwhile, a conventional ETF that actually holds real stocks (not the derivatives) will outperform the derivative tracking funds.

Perhaps one way of looking at this is that the $66 value of TOI arrived through a series of legal agreements which had prerequisite conditions. The value wasn't crystalized until those steps took place, and it took some time to occur. Long enough that when the index looked at the TOI position, it saw it as worthless, and dropped TOI (oops).

So... we shouldn't feel bad that we've all gotten confused along the way. Even Bay Street and index ETFs are confused by this event.
 

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This spinout was even more complex than I realized at first. The spinout TOI shares were assigned a fair market value of $0.0001 at the time of distribution, so all index providers saw the spinout as negligible, just about zero value. Then only after the pay date, another entity did the TOI acquisition, which bounced the share value up to $66. So the corporation(s) structured this spinout and buyout in a weird way.

TOI really was initially worth close to zero, on paper. The acquisition which boosted the share value was dependent on the spinout occurring successfully. So this wasn't just a ticker price glitch... first it was worthless. Then the acquisition fully completed. If that acquisition had not occurred, TOI would still be closer to $0 today.

This is also why TOI ended up on Venture! It didn't have a high enough share price/market cap to be listed on the TSX. Today of course it's absolutely huge at $2.3 billion, so it's kind of funny that it's on Venture.

There are several weird consequences of this, according to a proprietary Bay Street note I've seen. Apparently XIT is going to outperform its benchmark index, because the index ignored the TOI value. It seems that all the indexes ignored TOI because of its near zero valuation at dividend time.

Something that really might be of consequence. The proprietary note I read said that derivative-based synthetic index positions, like the Horizons ETFs, actually miss out on the TOI value because the index doesn't track it! So the Horizon ETF will track the index (because there is a swap which is a contract to track the index), but the index itself missed out on TOI due to a quirk in how they value spinoffs and dividends. Meanwhile, a conventional ETF that actually holds real stocks (not the derivatives) will outperform the derivative tracking funds.

Perhaps one way of looking at this is that the $66 value of TOI arrived through a series of legal agreements which had prerequisite conditions. The value wasn't crystalized until those steps took place, and it took some time to occur. Long enough that when the index looked at the TOI position, it saw it as worthless, and dropped TOI (oops).

So... we shouldn't feel bad that we've all gotten confused along the way. Even Bay Street and index ETFs are confused by this event.
Interesting, thanks for the info.
 

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CSU announced TOI's financial results and TOI is back to its ~$65 level.
 

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CSU announced TOI's financial results and TOI is back to its ~$65 level.
I saw the shares rally, that's pretty neat. This also means that the initial IPO/acquisition valuation was pretty accurate .... which is great to see.

I'm having a hard time finding anything bad to say about Constellation and their management. I first bought into this in mid 2019. It wasn't a particularly great entry point, but still...

21261
 

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I saw the shares rally, that's pretty neat. This also means that the initial IPO/acquisition valuation was pretty accurate .... which is great to see.

I'm having a hard time finding anything bad to say about Constellation and their management. I first bought into this in mid 2019. It wasn't a particularly great entry point, but still...

View attachment 21261
Yes, they've been amazing.

They've been slowing lately though, during the past 5 years. But when "slowing" means slowing down to "only" 20% CAGR, lol...

21262
 

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CSU up +4%.
TOI up +4-5% to $73-75.

CSU wants to cut dividends to have more money for bigger acquisitions.

I can't be happier than this.
 
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