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K3NTY where are you? Where's the bounce...
??
Uh-oh.
How many more are now trapped?
Before the merchants of doom and gloom get too carried away with prophesying the demise of Superdry, it is worth remembering that bidders have already shown more than a passing interest in the brand.
Cowell Fashion Company paid £36m in March last year to use the IP in a number of APAC countries, and Reliance bought a 76% stake in a joint venture with Superdry covering the Indian sub-continent in a transaction worth £28m. The latter deal is particularly interesting since it brings both immediate funds and a potentially lucrative revenue stream from a corner of the globe where the company hitherto had no meaningful presence. Further deals are not impossible.
Moreover, while other companies might simply be allowed to crash into oblivion, leaving shareholders with nothing and a rival retailer to walk away with all the assets, Superdry has a CEO with both personal and financial reasons for keeping the company afloat.
With no alternative in the offing, the tenets of the proposed restructuring plan - the rent reductions, loan extensions, open offer (option A) and delisting - will almost certainly be approved by shareholders. All of which is perfectly sensible.
While none of the above can guarantee a happy ending for shareholders, writing the company off at this stage seems more than a little premature. It may take some time, and it may never happen, but a return to health for Superdry can not be ruled out.
So fasten your seat belt and enjoy the ride.
Yes COPL different situation but the trading value was insane. Look at the past weeks trading volume increase with SDRY.
What I’m trying to say is traders pile in on situations like this and there is money to be made if you time your buy and sells correctly.
With COPL though the biggest bondholder itself was shorting the stock massively 50% or more in order to re-neg the placing price & conversion price lower.
So when they covered it had much more energy because of the massive short.
Each situation is a bit different.
Agree need to break 10p. It would’ve broke on Friday but being a Friday a lot of traders sell out for the weekend.
Thus, expect to see a bounce Monday morning with traders buying back in with a continued rise throughout the week with a mix of volatility. IMHO.
Understand
Let’s see if it can break 10p as that has been the major resistance
Personally no. I see a spike to 20p+ soon, based on what no sure but I’ve been in these situations before and there’s always a spike or two before a share delists. For me it’ll spike before end of April 2024.
IMHO.
You wrote… Priced to fail at 10p.
So you think 10 p is the top?
Maybe shorts are closing. Whiff of a bid and this sky rockets. It’s a risky game now for shorts.
Trying not to sound like a ramping fool but it could happen.
IMHO.
Priced to fail at 10p. Price correction in place and money to be made on trading a small Mcap and low shares in issue. Volatile SP with gains to be made. You’ll be surprised how further north the SP goes ;)
Look at COPL as an example. Towards the end they were broke and Bond Holders were selling out but the trading volume was insane with 30-40% gains in a day. Sometimes you just can’t explain why the SP is up or down. At the moment we clearly have more buyers than sellers and someone accumulating in the background.
IMHO.
Https://www.britishbulls.com/SignalPage.aspx?lang=en&Ticker=SDRY.L
Although I wouldn’t stay too long, end of May 2024 for me. IMHO.
Why’s it trading at over 9p?
Hi Deepvalue85, my thinking was, if Julian bought more stocks now, would that not increase his voting rights to achieve the Option A/B choices he wants approved at the General Meeting? I'm invested here and new to such situations as these - just interested to learn possible outcomes from those who are more experienced.
You’d believe investors would be happy that the share price is trading much higher than 1-5p range 😂
Not trying to figure out why it is not in that range. Oh well can’t please everyone! Have a good weekend people 😊
Morning MIKODX,
I agree you should pay close attention to what the company has stated in the rns. I also agree that the company is stating the best solution for them is to restructure and delist. If we stick with this logic then:
1) the company has provided a forecast (note forecast) of between £350 and £450m revenue at circa mid to high teen EBITDA multiple. If we take the lower bound revenue range and work with a median EBITDA multiple of 7, that equates to £24m at 1 x EBITDA for the business post delist (note the reference to pre IFRS16... that's interesting because post IFRS16 inflates EBITDA due to the increase in interest expense from my understanding).
2) if we stick with the theme of logic, why would the share price be above the stated equity range of 1-5pence? I cannot understand why? Do you have any thought (not conspiracies) on this?
Being in stocks for a long time also, expect the unexpected also. Good or bad.
Voting in May 2024 and equity raise in June/July 2024 till then anything can happen.
Personally, I expect the SP to continue climbing as at 10p this was priced to fail. The drop to 5p was panic selling and market makers taking advantage of the situation. IMHO.
Having been in stocks that have been in similar situation as this one, my advice to anyone invested, is believe what the company has told you so far. Don’t get sucked into the conspiracy theories being mentioned on this board. The company hasn’t mentioned anything about secret buyers, or potential secret buyers in their last RNS. What you do know is that the company is about to be taken private, and that the shares will be delisted. Make your decisions based on your own research, and go over every last detail in that last RNS with a fine tooth comb.
GL.
In either case, the trading statement will have a significant impact on the SP for good or bad!!!!
The bad news has been reflected and priced into the SP over the past year as evidenced by the SP performance over the last 12 months. Better than expected progress has been made in cost savings which is in the RNSs. Sales expectations have been lowered given the decline in sales as shown in the RNSs.
Overall, the bad news has been issued imo (reflected in the mcap). Weather conditions have been okay for trading and covid distortions in trading removed
Morning JT77,
Why would Julian purchase more shares when the two options presented would be a lower cost to aquire and take private?
Morning PAD004,
Why would the trading update be positive? In the rns statement, it was suggested that should the equity raise and delisting not be approved, the business would likely go into administration. Surely the statement would have been written with consideration to the current financial position of the company to date?
Could the large purchases be JD increasing his stake for a better voting position?