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Ocado will receive a fairer valuation for their market leading AI tech if they ditch the failing FTSE and move over to the NASDAQ. Also the major market for Ocado is the US going forward so it makes sense. Nothing will be achieved remaining on the failing FTSE, bar perhaps a cheap takeover which never seen a few succumb to recently.
Fair point graking but do they seem likely to get even 50% of their original ‘due’ from M&S ? And, isn’t OCDO’s retail division - their 50% of the JV - already a well defined entity that can be readily sold off?
M&S will feel that they’ve already stashed away £190m towards purchasing it because of OCDO’s performance failure, which has also lowered the perceived value of it. Back at the outset, M&S was reportedly due to pay Ocado £750m for its 50% stake. At the time ‘M&S shares fell by 12% as investors and analysts raised concerns that the 134-year-old high street retailer had overpaid for access to Ocado’s technology and delivery network.’ That source (Guardian 27/2/2019) went on to say: The plunge in M&S’s share price – the biggest one-day fall since 2016 – wiped more than £550m off the retailer’s market value. Ocado’s shares rose by 3%.’
Since then, the £750m payment has been reduced, possibly to £560m. If you were M&S what is the maximum you’d now offer for a buyout of the remainder? £600m tops? Total paid would then be £1160m - a saving of £340m on the original deal valuation of £1500m, around 22%. Nice work by M&S - somewhat reflected in the respective sp performance of the two outfits over the period since: https://invst.ly/13xddi .
Yes, it's worth noting that Ocado and M&S have had public issues in the past and resolved them. e.g. when M&S and Ocado first joined up Ocado was meant to stock entirely (mostly?) M&S produce but Ocado only took it up to 60% and M&S was pretty unhappy with that IIRC.
Well, today that figure is 90% and the problem is largely resolved.
Also, these legal battle often sound like they're a big deal, with lots of posturing from both sides. In reality, it's in no-one's interest to have a massive court battle, reputationally, or financially, and these things are often settled through out-of-court settlements. Once this is done, it'll all blow over.
Agree, totally oversold and driven down hard last week to get good entry point. This year will likely see inflation issues subside, interest rate reductions and the McKesson profit hit the books, I see this as a big turn around story. Price today certainly reflecting this.
Technically, trendline from 20th Dec 2023 to today is being tested at c. 468-470 on the daily. Past this and it's all to play for. GLA
470 is where it needs to crack on the 1hr
In my mind, it was absolutely oversold after the M&S news. That coupled with the 44% increase in revenue shows to me that the share at least has potential and IMO the benefits outweigh the risks in the short term.
If Ocado were to get its so called "due" from M&S then a sale of its retailing arm to M&S would not make sense. But a legal win would mean that Ocado would get more from other aspiring deliverers or simply a better offer from M&S. After this claim is resolved, Ocado ay then split into 2 separate PLC divisions making a valuation of its trading division and therefore a sale so much more straightforward.
495 would be significant - holding 480 would be a step upward. https://invst.ly/13xa5x
Break here 495 a poss
Yes - promising start to the week.
https://invst.ly/13x9m6
At 8ema again
Giovianno: I understand the ‘locked-in’ feeling you’ve expressed. OCDO is a volatile sp and it has previously recovered sharply - so selling at a loss represents as much of a risk as continuing to hold. My view this morning is that msuk is likely to be correct about 430 being retested, however the price has been levelling out and I’m no longer convinced that I’ll get an opportunity to buy much cheaper. It could be that all the bad news is now out there. TS’s statement of a legal challenge to M&S rather clumsily completed the task of gradually lowering investor expectations about that final payment IMV, so the total write off of the original £190m should now be baked into the sp and the scene is set for a potential recovery with the retail trading results in a fortnight. ATB.
Hi Neil: No, I’m not Valueplay. However I guess my saying so won’t matter much because you’ll believe what you want to believe. Speaking of conspiracies and misinformation:
You recently discussed the possibility that OCDO and M&S are in negotiations regarding ownership of the Retail JV and said that: ‘OG maybe content with the realised 23m’ [from M&S]’. You and Chilting also seemed to imply that both parties are spreading misinformation to deflect attention from the ongoing negotiations. Is that a fair summary?
Whilst there was a provision for £28m in the FY figures it hasn’t actually been realised (there was a net £23m figure relating to other items). TS told reporters that the £28m estimated valuation of the payment from M&S was "ludicrously low" (source BBC). My understanding is that it represented a further £67m reduction on the previously quoted ‘fair value’ of £95m given in November, which was 50% of the original £190m 'final payment' which was performance dependent. In other words OG's declared expectations have been rapidly reduced by 85% which can now be easily written off without too much further embarrassment. Skilfully managed down, some would say.
I don’t think the misinformation scenario is plausible given the damage to sentiment that such comments can cause. I was quite surprised that Chilting seemed onboard with the idea. However, I think that an M&S buyout of OCDO’s 50% could be a good move for both parties as OCDO would then become a pure supplier to retailers rather than a competitor trying to sell them its technology.
@msuk - this goes up from here IMO. Back up over 500 this week. GLA.
@giovanio so you own shares but are utterly convinced the SP is dropping to 300s and poss 200s yet you aren’t going to sell and buy back at those lower prices to make significant money. ok mate… 🙄
Tt1981, that message was for Boyo...obviously you are one of the locals.
You dont have to agree, nobody does...but have you got any better answers?
I don't know what you can see through?...can you see the price was 798 and now 440 odd?
Who do you think deramped 798p down to where we are now?
p.s....of course I own the shares you berk, at least I admitted I paid too much
Is Boyobach in fact Valueplay?
The support c 430 will be tested again
Gioviano - there is absolutely no way you are “locked in” here. Pure fear mongering and de ramping and we can see straight through it. If you were so confident it was dropping that much you would get out asap and not wait until 300s or 200s.
Unfortunately still in Boyo, went against original plan when influenced by someone else and didn't bail out second time for small loss. It's not being negative, it's being realistic now, there's no point rattling off 'hopeful scenarios' to people - when price fails at support points. The reality is..it failed.
Wkly says continue down despite some recent buys, no reversal yet. 340-ish is in the sights.
On current performance I wouldn't even be surprised if it went to 240-ish. Ocdo SHOULD be worth much more - of course I want it to be, but it failed at 10 and then failed at 8. Must be a reason? I'm not in charge of the sp. The bankers are and they will buy when THEY want to. Not before.
If you don't get out in time at peaks with OCD you are f.ed for months or years waiting like a fool hanging on talk of new technology breakthroughs. In 2020 /2021 sp targets were set at 27 and Steiner picked up a huge bonus when that was hit...now what?...a bonus when it hits 10p and his Goldman/ Osbourne buddies buy in?
ITV bounced after hitting 2 year low and VOD also coming back after hitting extremes, so I guess that's possible when sp rock bottom.
I would think Jun/Jul to see any improvement and then maybe only up to high 5's - unless some DRAMATIC event is announced, but the only one the market has reacted to so far is a fake Amazon takeover.
I'd be buying something else if I wasn't locked in here.
DYOR
I had buy order 438 didn't get filled and it took off c340.00 wo7ld have been a good day trade like yesterday...ocdo is not an investment(for me)..a logistic Co that ships food ,but a god trading stock,like BP,Glen,...why? Because its movement characteristics are manageable and can swing 10 to 30 points in a day ,I read funda guys talk about stocks all day long tbh nobody knows anything until a rns release anything in between is meaningless and pointless..price and volume all day long...Good w/e
No it isn't good Gioviano, but I'm trying to be less negative (it upsets some of the locals).
Are you still interested in OCDO? I assumed you'd have given up after the third 'February Disappointment' which. it seems, has now become an annual event.
I genuinely think OCDO has potential but it is a pure punt at present- I'm beginning to think that there could be a senior management problem holding it back. I bought back a small tranche at just over 450 this week , although that was actually more than I think it's currently worth . I should have checked the 8ema as per msuk's posts!
Wkly chart not looking good Boyo