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Monday morning they announce an approach to buy them out, say equal to 7 or so quid a share?.
The really really happy bit?, those b.stard shorters get totally hammered.
•was
Crazy really but we in a world where individuals make a wrong decision so they look for a bail out and a safety net….too many snowflakes about-make a wrong decision you pay for and move on like Beas the case for all of us in years gone by..
Bang on this….crazy world
An investigation into mis-sold car finance is the latest compensation bonanza
At the end of the day you’ve only got yourself to blame
Ben Wilkinson
Picture of Ben Wilkinson
Britain has been on the lookout for the “next PPI” compensation free-for-all for a good few years now.
The widespread mis-selling of payment protection insurance (PPI) for decades ended with more than 30m complaints lodged and a total of £38.3bn paid out.
The compensation bonanza reached fever pitch in 2019 when the deadline drew near and complaints were being thrown in by chancers who had no idea if they had ever been sold PPI and were just hoping for the best.
Granted, PPI was a genuine scandal where consumers could never actually claim on the insurance they had paid for. But since then, challengers for “the new PPI” title have included equity release, Help to Buy and timeshares. Right now, the leading contender for the “new PPI” crown is car finance.
Money Saving Expert Martin Lewis declared it to be “huge” news last month when the Financial Conduct Authority announced it was investigating potentially “widespread misconduct” by car dealers and credit brokers who may have sold finance at higher rates in return for extra pay from lenders. Mr Lewis reckons the compensation owed could be on the same scale as PPI and urged anyone who thinks they have been mis-sold to register a complaint now “as a marker”.
It makes one wonder how much of this has so far been driven by claims management lawyers, eager to find the next big payday. I fear this latest hype is more about compensation culture than righting any wrongs.
‘Years ago your first car would be an old banger. Now, new BMWs and Audis line the streets’
Car finance is rarely a smart financial decision. Years ago, you would drive a car you could afford. Your first car would be an old banger that did the job and cost very little to insure. New cars were for the wealthy only, and besides, why would you pay vast sums for a car that is only needed to get you from A to B? Now, new BMWs, Range Rovers and Audis line the streets and driveways of even the most rundown areas.
Car finance enables those who cannot afford a new luxury car to have one – regardless if it is good idea for them. The value of a new car is hardly a precise science. The value of new models can fall by as much as 40pc in the first year, the AA says. The truth is that drivers willing to pay a premium for a new car are offered a price and only if they are willing to pay it, a deal is struck.
As long as prices are clearly displayed and comparable, consumers should be left to make their own mistakes.
On trying to decide if to invest more and not to panic sell i have looked up some numbers
total motor finance.
If a pay-out does happen.
The practice stopped by FCA in jan 2021 I think i read some where that CBG stop the practice in 2016 or 2017 did i read this correctly?
My questions if anyone has the answer is
1) when did CBG stop this.
2) anyone have any clue on the % mark up
3) how would they work out what the commission or what the extra interest was would it state it on the contract?
2008 414m using 1% interest at 4m
2009 443m 4.4m
2010 649m 6.49m
2011 870m 8.7m
2012 1086m 10.86m
2013 1278m 12.78m
2014 1458m 14.58m
2015 1600m 16m
2016 1704m 17m
2017 1761m 17.6m
2018 1715m 17.6m
2019 1775m 17.7m
2020 1749m 17.49m
=165m+at 1% interest and 330m+ interest at 2%+ not including any compound interest that could be added with 100% claims.
Most likely 50%to75% claims
i am guessing most ran from 1 to 5 years
How ever bonkers this sounds i would be over the moon if it is only 200m that the analyst claims . This 200m possible compensation is a bump in the road in the grand scheme for this company not a 80% share price fall.
Even if it was 400m it would mean no dividend for 2025.but survivable.
Karlo, that's a very incongruous, off-topic post! It couldn't be that you have some kind of vested interest in XPP?
XPP A better bet imo.
Todays news.
Among London's small-caps, XP Power plunged 36%, after the manufacturer of power controllers, warned its 2024 outturn will be "significantly below market expectations". The Singapore-based firm said there will be a "shortfall in revenue" this year.
"This is based on recent order intake, revenue performance and discussions with customers, particularly within the Healthcare and Industrial Technology sectors, which confirm unusual, temporarily soft demand conditions and destocking. These softer trends have also emerged within our direct industry peers," XP Power said.
risers
price %
natwest group 229.50p 7.09
anto***asta 1,785.00p 5.65
baltic classifieds... 237.50p 4.63
tui ag reg shs (di) 556.00p 4.02
puretech health 191.60p 3.90
fallers
price %
airtel africa 96.30p -3.22
close brothers group 299.20p -2.98
trainline 314.40p -2.66
wizz air holdings 2,064.00p -2.13
w.a.g payment... 83.20p -2.12
"lower down the order close bros group bounced off 15 year lows to finish at 299p. late chatter in the market suggested the company could succumb to private equity. the 145 year old business has seen it's shares plunge 80% amid an fca probe into the car loans market."
lloyds and barclays also involved but no real falls of late there. is it shorters here?
They even made the Times
Two of the world’s biggest hedge funds are expected to have reaped windfalls by betting against shares of Close Brothers ahead of their sharp fall this week and the scrapping of the merchant bank’s dividend.
Marshall Wace and Millennium both have significant short positions in Close Brothers’ stock, filings with the Financial Conduct Authority show.
“Shorting” is a technique enabling funds to profit from falling stock prices. Shares in the FTSE 250 merchant bank have slumped by about 60 per cent since January 11, when the FCA revealed an inquiry into the car loans market. A fifth of Close Brothers’ loan book, about £1.95 billion, is in motor finance and investors fear that the regulator’s intervention could result in the bank being forced to pay a fine or compensation.
• Close Brothers scraps dividend amid motor finance investigation
On Thursday Close Brothers revealed that it was cancelling dividend payments this year to bolster its capital position ahead of the outcome of the FCA’s review. This prompted a 22.5 per cent drop in its share price on that day alone and the stock slid by a further 9¼p, or 3 per cent, to close on 299¼p on Friday. Close Brothers was valued at almost £1.2 billion by the stock market before the FCA announced its review, but it now has market capitalisation of £450 million.
The FCA requires funds to publicly disclose shorts once a position reaches 0.5 per cent of a company’s issued share capital. Marshall Wace had amassed a 0.62 per cent short in Close Brothers by Monday, while Millennium’s short reached 0.56 per cent a day later, filings made with the regulator show. Both hedge funds declined to comment.
Bosses at Lloyds Banking Group, who are due to present the lender’s annual results next Thursday, are likely to face questions about the group’s exposure to the FCA’s inquiry. Lloyds is a big player in car loans, with a motor finance loan book of more than £15 billion.
The London-based Marshall Wace, which was co-founded by Sir Paul Marshall, the GB News backer, is an influential hedge fund that manages about $62 billion in assets. Millennium, which is based in New York but has a big presence in London, also oversees more than $62 billion.
Wow, they somehow managed to increase the day before the dividend removal was announced. Pure coincidence I’m sure.
Today's low 284p yesterday 278p closed 295p the spread has been 0.4% both days .
Day traders swapping money .
Big boys increased there shorts
Fund................. % Short...........................Change Date Changed
Marshall Wace Llp 0.73%..............................0.11%........ 15 Feb 2024
Millennium Capital (Difc) Limited.0.85%. 0.29%........ 15 Feb 2024
JWB is there any delay on that info. Are you saying they're starting to short around 300p? Or was the short placed 48hrs ago (there's often a delay in reported data on short sites). There's a big difference between those two possibilities
Agreed. Was already a shareholder but averaging down at this price. It’s totally oversold.
Just declared
Millennium also increased
Totally priced in and some…
From 1700 to 300 in a just few years.....I see only upside from now. The FCA issue has been baked in.
One of the most traded stocks on Interactive Investor with 86% being buys
Just bought a few more for 298 or so. As others have said, although there is risk in uncertainty, it looks likely that all or most of it is baked in on this drop from 780ish to 300ish. Well, what's done is done for now. Fingers crossed I've not been too reactive here.
I'm rushing a bit here which is rarely good, but I've bought a few shares now at around 298.
This has just come to my notice (via Citywire). I'm looking at it now (opened a small leveraged long at 292), I don't know how to make a guess at where the bottom might be on this, other than to try to watch for buyers to over come sellers (higher low, higher high etc). Anyone know how to figure out a target for the bottom? In theory, this could be it here, but I can find a very forced and therefore likely invalid reason to consider the 170's as possible). Would be very interested in views.
What I can’t understand is why they have reduced. The risk of a penalty has been there for some time and that is when they should have adjusted (and they did). It doesn’t make sense that they adjust again on the suspension of the dividend. The penalty (if it comes) will have to be paid from somewhere and that hasn’t changed since yesterday’s update.
As you have suggested, it just feels like they’ve gone “whoops the price has moved a lot”, best adjust my target so it looks a little more realistic. The core business and the risk of a penalty is exactly the same as it was when they set their last target, all the business has done is be prudent and prepared in case that penalty comes to protect its share holders. I have bought in here based on that common sense approach.
Indeed you did>
When it gets reinstated in years (as it will no dount) to come even say reduced to 40p etc this will pay off the SP today in 7 years or if the 70p is maintained in 4 years.
Not to mention the capital gain that will come at some point.
Accumulating even it if halves from here. Makes sense to me.
I called a suspension of the dividend (not difficult)at about £5 odd however the current price is completely unhinged and very oversold here
Yep been saying for years these analysts are useless and accountable to no one, as useful as a handbrake in a canoe..
The after the event mob cut their targets to 375 and 425 - noteable still above the current share price.
Why bother at they held 750 and 1100 price targets?
It makes me smile that people buy and sell on the trenght of these o-o-d notes.
Would have so much more respect if they called the moves PRIOR to the drop rather than trying to justify their change in a revised note.
They are followers not leaders.
Be interesting when the price returns to £6.
Will they issue a note prior to the move up or wait until it does and then issue one !