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The hedging is done naturally everywhere except Asia but the plan is that this will be fine as they develop local nutrition manufacturing
They obviously use financial tools as much as possible but the utopia is the natural hedge and will be done
I think a better plan for short term would be telling us that M&A could be back on with current cash
My view is this aint going private
what would I do???
1) initiate cost reduction programme circa 20% of current head count. May be not feasible but surely there are savings to be squeezed out
2) invest in further head count for digital data and technology to accelerate ingenuity
3) advise market that MM to into non exec chair role on appointment of new chief executive.
4) initiate review of currency hedging strategy
But I don’t know much about anything really, but thats what i would try if i were a billionaire owner...gotta be Better than shouting at the moon which is my plan B
I still can’t work out what they are really doing, so grateful if i could be set straight
Well said Cantona : well said. And I would add until those issues unravel (that a good Chair would steward) it will be hard to easily see the underlying value. Not knowing / understanding is a RISK. And a lot of RISK is priced into the SP. Chair is a big +VE move that would enhance MM and all. Hoping its soon and a heavyweight.
@ephermal…I think one practical issue is that the board members who represent significant shareholders (including MM) need to be aligned on strategy/options. If they are, then if one of these shareholders is going to increase its position then they will want to influence the appmt of the Chair, albeit still independent …if they are in conflict then it may well be they have to appoint a truly independent chair who is acceptable to all parties to execute the first stage(s) of whatever structure/spin offs being worked on…that may well be a reason why someone not appointed. Any incoming candidate may not want to take the role if they are going to get replaced post divestment/ take private or get involved in a boardroom scrap given MM, Sofina, Softbank, Belerion and even Dominic Murphy if CVC lurking as an option… lots of governance issues here which may not be appealing unless some success related reward for incoming chair
Hi Ste. Trying to look at this board sparingly. Always welcome your comments but disagree a little with this. I didn’t think these results warranted a c.25% slip in SP nor can I think it fair the Board did. What is right is that a good Chair would ensure there is a back-up plan or another card to play quite quickly and my hope is one is in place soon so we don’t continue to be choppy when it could be a little smoother. Hoping one is in soon, by 31 Mar certainly
Agreed poker. Not just the rates but the purchases being withdrawn, double whammy. Rates in other countries have to rise to stop issues like they have in Turkey and others where the currency is worthless. Borrow is usd paying back with mass bankruptcy and inflation.
Oxford.. yikes let's hope they don't invade. I feel like Germany and France will give Ukraine to Russia oe not argue as they want the gas and America will sanction them.. or he will back off I hope. All above my pay grade that lol I'll stick to my paper round :)
" I agree that inflation will most likely persist into next year in terms of being above target "
yes...true...
The Bank of England suggested it would take 2 years to come back down to 2% once peaked and starting the decline
The question is ...how many IR will the FED add in this year ?..that is what is freaking out the market and helped make a strong move from Growth to Value. Value is now priced in for the short term following the recent moves.
The bets on 4 FED rate rises this year dropped yesterday...as many are now believing that to be too much ....and next week at the FED meeting...Jerome Powell will give a better indication ...will Powell back off a bit ?
Powell and the FED have to get things right.....that is what the markets are worried about and trying to send a message about
Clearly if growth is going for new acquisitions then the borrowing costs will be going up....so.the price you pay for the acquisition has to be hard negotiated to ensure the earnings potential reflect the cost
Insiderknowledge- I agree that inflation will most likely persist into next year in terms of being above target but as an investor I think we’ll see markets start to look at growth again as soon as we see a sustained reduction even if it is still over target. Like you, this is only my opinion and if Russia invades Ukraine, all bets are off!
For those on this bb whom claimed to have shorted THG , FFS, go out and spend your money or freaking go and study other bb and see what else you can invest in. Why p1ss LtHs off constantly from morning till noon, from noon till darkness....
By the way they are expecting inflation to continue beyond the end of this and next year as it takes 18 months to start to see rate rises impact inflation. Ticked your post up its a good thoughtful reply Oxfordbull
Not mine the central banks definition and what they say. Not my opinion take it up with the central anks.
I agree stagflation is on the cards. Personal opinion mind you. Good time to pay off any non foxed interest debts!
Insiderknowledge- depends on your definition of transitory really. They were taking about it being transitory in terms of not having to move on rates but it has obviously spooked them and they have had to act. Ultimately, of course it’s transitory. Natural Gas prices are the main driver now as worldwide supply issues in general are starting to ease. I’m sure we’ll see inflation peak in the next 3-6months and then a steady decline into the end of the year. Stagflation is the main issue now though and the central banks have few tools in the armory to deal with that.
Rich1 keep up. They no longer believe the inflation to be transitory and have accepted they was wrong.
Lots of cash and a low share price, could we see a share buyback scheme?
Amazed that THG senior management didnt expect SP erosion on these results. I figured they had back up RNS on the structural/ governance and maybe SB issues
Fair to say, I m totally disillushioned now
Tin Hats on Lads
Got to say I have been most critical of this company but the last results were extremely decent and the cash is more than expected. It's all sentiment.
Yeah, this sp in never going to come back. The writing is on the wall, but like idiots we still want our initial capital back, so we wait, come up with excuses and then wait some more.
"Give it time, it will come back", sure just like the Titanic, that will make a comeback sooner!
Remember it's a cliff edge drop, the climb back is a 1% incline gradient, not 10 or 20%, but one if we are lucky.
The shorters that called it below 150 were right, now lets see if it reaches the magic £1.00....
Completely agree Rich. This price action has very little to do with THG fundamentals and everything to do with market sensitivities over inflation and rates. It does make me laugh when I come on here because everyone feels that it’s just THG that is suffering but if you have a portfolio, you know that it isn’t. My advice is just to wait, don’t average down until you see a substantial reversal because it’s pointless. You have to remember that although 2022 is going to be a tough year, as soon as inflation has peaked and we see it start to reverse, growth will be in favour again. Patience is the key.
Rich, maybe it is all a collaborated scam between those city boys, brokers ratings and shorters themselves. We've been all sucked in to this.
City makes money by creating bubbles (both optimistic and pessimistic) and get people dragged into them. Agree long term investments win provided business where you invest delivers growth. Colliding with hedge funds who have more power and control in the markets when your house is not in order calls for further trouble.
No doubt, but it was the same city that priced the IPO at £5 and had broker ratings of £10+ less than 18 months ago. Fundamentally the business hasn't changed and continues to trade above IPO forecast. The inflationary environment, which most believe is transitionary, is new but that impacts all businesses. Fundamentals win if you can hold long enough
And all the excuses just keep flowing like a torrent of effluent that has escaped an overflowed sewage system.
Enablers.
They keep coming up with why THG is such a 'great company', it well maybe (I certainly do not see the management as that) but the city sees it as way over valued.
Going down on daily basis. Worst management