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My guess is that the next news will be bad taking the SP down further. This could be:
- Viceroy response to BOD or new issues raised
- demotion from FTSE250
- further delays with issue of audited results to 31 August or worse still concerns raised by BDO over the previously audited figures. The longer the issuing of the audited results the greater the uncertainty and risk of bad news in this respect and the further the SP will fall.
Care needs to be taken here- don't gamble too much on it.
GLA
This price still not low enough to get new takers atm, shorts will be able to decimate this until there are some tempting risk/reward, so many decent companies way cheaper atm.
Dividends should be paid from rent, not from upward evaluation.
The half year results to 28 Feb show a PBT of £38m with £26m coming from an upward revaluation of properties. For the year to August 2021 the PBT was £21m with £14m from upward revaluation. IF the values start to fall (and they easily could with rising interest rates, cost of living crisis etc) then this would severely hit reported profits and dividends paid. For example a 10% fall in property values would hit profits by over £70m, wiping out at least a year's profits. Hopefully BDO will've looked carefully at property values and related financing (are all related borrowings accounted for?). Users have asked where there could be a fraud here- I'd suggest that if there is one then it's most likely to be around inflated property values and/or understated liabilities.
GLA
It does amaze me how fast they can drop a share price!
Shorter's definitely have a lot to gain! Hopefully they start closing now and the share price can move up!
If you look at the trades, their are quite a lof of 20000 lots buying around 46
In case this is fraud, they should put an example in place and put them away in jail for 25 years
What a drop! I managed to get some more at 46.50 Hopefully it goes well! GLA
I must be a gambler as also have shares in REVB although I could have taken large profit, I chose to leave most in shares during the suspension outcome. Keeps the gambling buzz alive but can come at an expensive loss. Need to get back to boring dividend stocks, but an addiction is so hard to control.
It's a question of trust- do you believe the BOD or not? Once lost trust is difficult to gain.
There are plenty of other companies to invest in without the issues facing Home so if you're not a gambler then leave this company well alone.
Like Gruyere I lost several £k on NMC and as he said it was a FTSE100 company, with over 40 years of trading, apparently profitable and cash generating with the backing of tangible assets in the form of modern hospitals and with all this audited/verified by EY BUT in the event this was all a giant scam. Hope it's not the same here BUT it could be and I've little faith in BDO as auditors after the mess with REVB and others.
GLA but be careful and don't risk more than you can afford to lose.
NMC. That one was a very close call for me and luckily bailed out day before it was suspended with a small profit. Could also have lost a very large amount but initially bought in believing that the corruption wasn`t true. Have lost out in this one as sold this week at a small loss and this is very similar scenario to NMC despite the Company refuting the claims against it accounting. Wont be back in here again but sincerely hope that all is good and Company can move on. I do believe that Viceroy have some truth here though so be careful.
I am not sure why there has been such a drop! I would have thought it may have increased today! MMS driving prices down! GLA
Well it certainly looks like markets are panicking and believing Viceroy rather than the repudiation from the BOD.
Can work out either way. AIM stock Burford suffered a similar Short attack by a USA firm and price collapsed, refuted it with evidence and all its resources as a legal finance firm.. but is still just about half the value it had been.
NMC Health were 'outed' in similar fashion - refuted it - but unfortunately it was all too true. Result is I have a 5 figure loss showing with shares suspended and realistically worthless- and that was an FT100 stock!
You pays your money and takes your chances....good luck, but not for me this time.
Viceroy nothing more than chancers. Clearly rebuked every aspect. Still guessing the market will fanny around for months as the bots will force any jittery hands (those on leverage, or short term capital) to vacate at the worst possible prices for the institutions to hoofer up. I do agree that shorting should be banned to be honest especially in areas of national importance such as housing the most vulnerable in society. Imagine these people were on the streets and all the social strife that would entail for all those around them. Now HOME can't raise more equity to help the government deal with the problem. It should be the shareholders of the company who dictate the value, not some people who's sole aim is to reduce the value of something they don't own to profit whilst they hide away in the tax dodging cayman Islands. Capitalism at its worst.
I predict a dark, shadowy figure appearing out of the fog. Someone new, yet mystical, who will tell all investors what a dodgy company this is, and how the world will end with homelessness and famine.
Me, well I must be a gambler, because I just doubled up. Hopefully those with doubts will quit asap and not come back to share their doom and gloom.
IF the published information is proven to be correct then the SP should rise to around 110p- it's level 3 months or so ago. IF however, Viceroy are proven correct then the SP could fall and indeed in the worst case the company could go bust leaving shareholders with nothing. So I see this as a double or quits situation- do you feel lucky? Whatever, at the moment this is a gamble and not an investment.
GLA
ShearClass - Then again Boohoo just increased their stake in RevB to 26.47%.
They’ve got debt of £250m though, if anything below board has happened then they’ll very likely be in breach of covenants and up sh*t creek. Fridays statement definitely has similarities to REVB’s 2nd Aug RNS which basically said nothing was wrong but the auditors needed longer to complete the audit. 4 months later the CEO has gone and there is no sign of it coming back from suspension. Wouldn’t surprise me at all so see a similar chain of events play out here.
You're right Wim. The 28 Feb'22 accounts show net assets (which include properties revalued to that date) of £624m. This compares to a market value as of now of £472m. IF the properties are fairly valued and there are no "missing" liabilities then the SP would need to be 79p to produce a market value of £624m. This implies a potential uplift in SP of almost a third from the current 60p. Potential problems are the damage to Home's reputation of any accounting issues, downward revaluation of properties and a loss in profitability should the REIT rules have been infringed resulting in some or all of profits and capital gains becoming taxable. So there would appear to be a potential upside of 33% or so. Difficult to estimate the potential downside until more information is released but hopefully the current SP reflects all the bad news and represents a buying opportunity. Anyway GLA.
But here there should be hard assets, partially finaned with a loan at 2.30%. In the worst case , they sell all and liquidate the company.
The situation here reminds me of Revolution Beauty which was also audited by BDO. Audited results were delayed and the company was later and is still suspended. Should PI's avoid companies audited by BDO? Let's hope we don't get a repeat of RevB here.
Will be interesting to see the market's response to Friday's late RNS tomorrow- I fear another fall in the SP.
This story will I feel rumble on for sometime- there's rarely smoke without a fire and I fear that the SP will struggle for a while and may never recover.
Be wary here.
GLA
"James Snape as Chief Financial Officer. Prior to that, James was a senior member of BDO's Real Estate and Construction team in London"
The Company's Results were on target to be published on 28 November 2022, as previously announced, having been audited by BDO LLP ("BDO")
Twice the word BDO... Either BDO is going to come with a new audit report or maybe they will not in case the allegations are true.
Damn, I was watching this stock sometime, I had in a limit order to buy at 72.5. Executed the day the report came out, thought I had a bargain here.
Exactly. Ultimately, this is a listed company that is effectively paying dividends with taxpayers money, so all parts of its operation should be subject to the utmost scrutiny to ensure everything is as it should be. Enhanced audit measures should be the norm.
It’ll be very interesting to see how things unfold over the next few weeks, as per Twitter the shorter has got more information lined up for release after Home issue their response…