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ADM shares dropped from £24 to £19 in one day in reaction to another insurance company. I agree there is a contagion aspect that spreads to other businesses so when Sabre goes down 40% then Admiral and Direct Line will also go down because of contagion. ADM went down from 24 to 19 on Thursday.
I know for a fact that JPM advised their private clients on Friday morning to short ADM ahead of JPM putting put out a sell note on Friday morning. I have actually read that sell note, plus the Jefferies one today. In both cases so called "intelligent" analysts are simply regurgitating the news story of Thursday when the shares went down from 24 to 19 - the contagion effect.
What is despicable is both JPM (and probably Jefferies) deliberately deramping this company. Im told by people im having dinner with tomorrow night that ADM is the most shorted share in the FTSE 100.
Im beginning to sound like some bitter and twisted disgruntled person but i am none of these. i play by the rules in a way that JPM and their clients dont.
Best way to deal with this (given useless regulators) is to declare a healthy dividend which the shorters will have to find!
Wiscos - they find the healthy divi by making the difference in the drop, in many cases itll drop slightly more than the dive......
Back to the drawing board.
Hawthorn, the short-tracker sites don't as yet support the view that ''ADM is the most shorted share in the FTSE 100'' I'm sure there are some clients doing a few short deals but as far as I can see the percentage of stock must be small, unless you can demonstrate differently. I would have thought Kingfisher was miles ahead in the shorting compared to Admiral.
Simon - think you are confusing me with AN Other as I havent commented on shorting..........
That said I could see why someone might take the view that this is something to consider because (as I mentioned before) this is a market wide issue affecting all insurers to some degree or another and it is one that is not fully understood. The big question is why are these insurers now saying that it is an issue and they must take action now when it has been obvious that claims inflation has been building and growing for a long time? a shortage of cars fuelled in part by a lack of chips was always going to have a big impact on repair costs, credit hire charges, total loss claim pay outs. Sounds like the decision was to write lots more policies at what may now be premiums that are far too low and hope for the best! It will be interesting to see what Admiral come out with because they are a massive part of the motor insurance market in the UK and if Ernst & Young are talking about a ratio of around 111% its difficult to see how they can be part of that.
DYOR
Can't drop for ever if paying a healthy dividend. Insurance premiums will obviously rise so a great medium term investment. Really is time shorting was banned. What useful function does it fulfilling other than destroying companies and stealing shareholder value and giving it to greedy hedge funds?
Many apologies Hawthorn. My comments were meant to be directed at Bouveries who was talking about ADM being the biggest shorted share in the footsie 100 which I'm pretty sure is incorrect .
Am I correct in thinking that there is still some divided left to pay from the comparison site sale last year? I'm sure it was split into 3 and only 2 payments have been made
From FY results: "We have already started to return £400m of the proceeds to shareholders in the form of special dividends, split equally over the interim 2021, final 2021 and interim 2022 dividends. 46 pence per share of the total final 2021 dividend (of 118 pence per share) is in respect of the Penguin sale and the final 45 pence per share will follow in October 2022."
Thank you, I thought we had that to look forward to
@Bouveries: There are no declared shorts on ADM, a declaration has to be made when the limit of 0.5% of issued share capital is reached and at intervals of 0.1% above that limit. There will of course be shorts on the company but below the limit. I can guarantee you that the company is not the most shorted in the FTSE and suspect it will be in the in the lower quartile.