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lol at £16 BN.
You would be better off buying melrose now if you wanted part of it! £4bn market cap. Thats a quarter of what they normally return for an asset! (£8bn gkn would hope for £16bn).
Honestly? I think they are being over punished by a market that doesn't fully see the potential. People want surprise news in a melrose update. Like they had accepted a multi billion deal for part of the business. This news feels like a move to get away from having bought something that wont see a market recovery for a while.
I guess rate hikes / recession / Putin nuking everyone is worse than covid lockdowns
Why is Melrose fairing worse than everything else though.
I knocked 20p of my average from trading but 140p is looking awful now! Never saw this going like we were going into another pandemic! Surely the bottom has to be close. Nervous though with all the rate hikes and recession talk!
The worm is not for turning it seems.
Hopefully soon
offers at a level they found acceptable were not forthcoming?.
That's how it looks to me.
£1 the next level..?
I suspect that it's more a case of there being little prospect for a trade sale of the GKN components in the forseeable future that has driven Melrose down the demerger route.
Aerospace is also likely to carry a higher rating / p/e ratio than automotive - so the demerger may enable better shareholder returns for that business, free of any "drag" from the rest of Melrose.
As other posters have indicated, possible recessions are never good for the business's that Melrose takes on. But I suspect the fall is also driven by the likely time it will take to complete the demerger - sell now to pick up on other investment opportunities over the next few months while Melrose does all the lengthy work it needs to.
There isn't any evidence to support this.
It is OFTEN down ....but not ALWAYS .. and by way of example check the share price movement of Barclays on the 12th August - the share price rose on that day even though a 2.25p dividend was declared.
TB, "but the day after is ALWAYS a down day, no matter what stock or what the market conditions are"
Do you have evidence to support this ?
@Jax05 - I think you will do very well, in time, with a £1.05 or less average here and that will be a lot less than the majority writing on this board (including me).
The debate for LTHs is 'how long to wait before averaging down '
Not always but I get your point.
The divi has not accounted for the overall slide......but the day after is ALWAYS a down day, no matter what stock or what the market conditions are.
You’ve got to be brazen to assume it’s the divi that’s done this
I’ve taken a position here late doors today so expect further falls - sorry about that.
@TraderBuckie - but the dividend was only 0.85p per share - which goes no way to explain the share price destruction here.
The rot set in when the management announced they were going to float (rather than sell) the automotive business.
The consequence of this decision is that Melrose will be split into 2 separate entities BOTH of which may not be large enough to gain entry or remain in the FTSE 100.
So ....lots of institutions bailing before the split ....is the way I read it. And that's why it looks like we may head into penny share territory.
A rare mistake from a, usually, very astute management team
My understanding is you needed to be a holder at close of play on Friday to qualify for dividends which will be paid later in the year. There is always a share price drop the following trading day as people who have stayed in purely for the dividends exit.
... as per my earlier post .....£1.08 has been breached and it looks and feels like it's going to head below £1 now .....and I'm hoping 96p will provide some support.
However - stock markets are looking like they might fall in October and I fear we could be heading back towards the 80s (last seen in the depths of Covid).
This is not a stock that does well in a bear market / recession though and with a NAV of £1.80/share ... Looks to be a fabulous investment at these levels!
GLA
Can't work out why this share has fallen so much,I know the market is not great, but this must be along the worst performers in the FTSE100 this year
Who cares about the post, anyone looking at the SP has a right to think there has been no buy back! I didnt see anything in the rns update that warranted such a drop in the SP, hopefully this will pick up soon.
Thanks - I've requested LSE remove the post to avoid
any confusion - your reply is accurate.
RNS 2nd August. Buy back complete.
which ..must end no last than 31 October 2022.
I've been in and out with these a few times. The top table team are wizards at turning companies round. They've just met a steamroller of economic problems these last few years. FKI was my baptism with them..... Cud be a decent investment if their stars start to align.
I dunno, but MW saw it coming. If they reduce again I might be tempted back in at these levels.