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The decisions were taken by the board of Ocado Retail which is split 50/50 between the 2 companies.
It is a joint decision making process
The overcapacity came about because of mismanagement by Ocado re the reaction to the COVID situation.
Marks and a Spencer's rightly are disputing their payment owed to Ocado re this issue.
"Incidentally, if there is serious talk of shifting to Nasdaq, then surely shorts would have to reduce risk. "
That is a very interesting point Sangi, I can't quickly find the answer. When companies merge, it seems that the process is straighforward and might involve a small fee, but the shorts stay in place. But for an exchange move I'm not finding anything clear. If the shorts had to be covered, then it would provide an opportunity for arbitrage that would be too easy I suspect. I assume that there is a process in place that prevents an easy opportunity for us as SH's to benefit, but if anyone knows the detail, I'd be very interested.
https://www.reddit.com/r/fidelityinvestments/comments/pnjm0e/what_is_the_merger_process_for_short_positions/
And the overcapacity came about because of the reaction to the COVID situation.
After a dip online share of grocery has started trending up again. As an idea of how high it could go it's at over 25% in South Korea.
The over capacity at ocado retail isn't going to last long at the rate sales are increasing. There also needs to be some over capacity otherwise how would accept new orders?
From this https://www.lse.co.uk/rns/OCDO/statement-regarding-new-international-partnership-97stcqfzrnsh25g.html
Ocado Group plc ("Ocado") has signed a partnership agreement with The Kroger Co. ("Kroger") under which Ocado's technology will be used in the US exclusively by Kroger for grocery and other food distribution related activities.
Ocado and Kroger have agreed to the following:
● Ocado believes Kroger to be the grocer best-positioned to win in US grocery and will discontinue discussions with other US-based retailers
● Kroger agrees to pay monthly exclusivity and consultancy fees which will offset in part the total fees that are expected to be agreed between the two parties
● An overall services agreement will be negotiated to provide for the drawdown of multiple CFCs across the US, on the basis of standard Ocado OSP terms
● Kroger will subscribe for up to 33,146,200 new ordinary shares in the capital of Ocado, equivalent to 5% of the existing issued share capital of Ocado, at a value of £183m.
Kroger and Ocado are already working to identify the first three sites in 2018 for development of new, automated warehouse facilities in the US, and will identify up to a total of 20 over the first three years of the agreement. In the event of a failure to commit to the target capacity, Kroger will pay compensation to Ocado.
In the longer term, Kroger will retain exclusivity in the US conditional on it meeting market share targets or ordering an agreed number of CFCs per annum.
There is very little talk in this board re the 2 largest Ocado Solutions contracts having extended paused re commissioning new CFCs. The very slow sign up of new CFC customers. The large overcapacity at Ocado retail crimping profitability. Etc etc
But there we go. It's been plain to see over the last 2 years for me. The value has been there re the downside and it has been very profitable. Follow the value, DYOR.
The question is can OIA sell the OSP to US clients outside grocery without affecting the Kroger arrangement?
Maybe they can as the stipulation could relate solely to other grocery companies.
No one is trying to push any issues under the carpet.
Does your endless stream of negativity provide a balanced picture?
Only a fool values a company by the SP alone. If that were the case we could all pack up and go home.
Solutions revenue increased 44% last year. News can come out of nowhere with Ocado. Only time will tell if they succeed in their endeavours.
Incidentally, if there is serious talk of shifting to Nasdaq, then surely shorts would have to reduce risk.
Not sure what happens with borrowed shares if they are going to be exchanged for US issues. Even if the borrower can continue the contract and pay back with US stock there is then additional currency risk
Kroger needs to sh*t or get off the pot. Amazon awaits once/if they have got out the way.
RP,
Well done re selling at £6. So many issues at Ocado group currently. Well done on seeing the reality instead of just hoping things better. The crowd on here only want to hear positivity. Negative issues pushed under the carpet.
If it had anything to do with me RP, then thankyou for your thankyou.
I'd like to say a BIG THANK YOU to some of the more knowledgeable posters who gave some EXCELLENT insight into the share price which saved me thousands by bailing when it fell below £6.
Thank you.
Ocados Luton CFC has been alive for about 7 months now and has grown its oredrs delivered every week from under 40k a week to above 55 k orders per week as of last week.
The CFC is performing extremely well as the pick rate was the highest last week as it ever been making the Luton CFC best performing of all.
Hopefully they can replicate this through the all CFC and drive efficiency foe all partners to demostrate that this model is a solution that more partners will be interested in.
Just my opinion
GLA
You have some quality posts Sangijuelas1. Thanks for the links and summaries.
This is what they are offering to e-commerce retailers like Amazon
https://ocadointelligentautomation.com/industries/consumer-packaged-goods
It was undervalued gla
I wouldn’t be surprised if Ocado delivered the mail in. Ext few years -seems to me to be they would a more
Efficient job
A guy from Amazon involved in warehouse automation liked an Ocado Intelligent Automation post on Automated Storage and Retrieval on LinkedIn.
Got me thinking how well suited the Ocado system would be for Amazon. I have watched videos of the use of robots in Amazon warehouses and they basically just move units stacked with products around for manual picking.
Maybe Amazon were interested in a bid for Ocado based on wanting to buy the tech rather than the business itself.
Either the offer was inadequate or existing contracts with partners meant that you had to buy the business not just the tech.
So maybe Amazon actually need to contract the tech to try out either as a pilot or at a particular site.
Would make sense given the growing tensions with them and their workforce. Increased efforts at organising labour in unions at their sites.
Wonder where a contract for OIA with any of Amazon, Shopify, Shein or Temu would take the SP?
I would like to know more about the marketing efforts of OIA and the strategy they are using to get contracts. Hopefully they are targeting big logos and not messing about with little fish.
Very positive news today on market share growth, only way is UP from here, can't believe we're still this low.
Have patience and you will be rewarded
There's gap at 520 and 800 level too. Can we go there first please?
Gap at 350p, short as sp will fall back to this level. DCB.
Wants to break higher cup and hadle set up
https://invst.ly/14hzk8
Also a take over target now more then ever imo.
Surely M&S would want to resolve the issue now given that Ocado is storming the online grocery market over the last 2 quarters...