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Other growth stocks have somewhat pulled back but at this rate of decline, this will be in the 30s or 40s come mid September.
City and MMs clearly showing their contempt for Moulding.
Not a forced seller.
They chose to sell THG rather than something else.
They clearly believed THG offered a lower return.
It’s appalling news as unlike shorters they won’t be forced to buy back at some point.
Genuine selling always much worse than shorts adding.
You make good points kando. But we are not talking about cancelling the shares which would be absurd, we are talking about shares to be kept in treasury which can be sold at a later date. Such is the deep value here that its hard to see anything outpacing the SP gain once the tide turns on growth stocks.
Talking about share buybacks when a company is not yet cash generative is fairly absurd. If there is any surplus cash, and the company avoids needing to raise any further capital to continue operations (which thankfully appears likely even under Barclay's most pessimistic forecasts of projected cashburn), I'd much rather that hypothetical excess cash were spent on further productive acquisitions. Share buybacks are for companies with huge cash generation but few possibilities or ideas for future growth. THG has neither. It's not yet generating cash but is focused on continued and rapid revenue growth, as it should be.
If the press couldn't wrap their heads around Moulding buying shares on behalf of his family and friends, or the concept of him giving pledged money to charity, without painting him as a peculiarly sinister unhinged oddity, then how do you imagine they'd run with a cash burning growth stock ****ing money away it needs to survive the next 2-3 years on buybacks? They'd (this time, rightly) have a field day.
clearly selling in the background
What baffles me is how ready the market movers are to bring down the share price on such small trades. About at 3rd of trades today are less than £1k, and the vast majority less than £10k. Not the £100k-£500k trades that would indicate that an II is selling.
Yet here we are, a drift from 67.2p down to 63.7p.
Share buybacks are not a bad idea when there is deep value to be had and surplus FCF in which the the potential appreciation of the stock will easily outpace any ROCE. Warren buffet frequently dips his toe into his own stock when the stock falls below 1x NAV like he did during 2020.
Just depends how much surplus FCF is sloshing around given the heightened safety nets required for turbulent and unpredictable times like this.
However the argument against would be investors questioning whether they have run out of ideas re growth, capital could be spent elsewhere growing business ect ect. But overall, FCF permitting it might not be a bad idea.
The fact that Jupiter are forced sellers should actually give shareholders confidence. It explains the appalling sp performance. It is a short term situation. Once the dust has settled, maybe fundamentals will take hold again.
IR should be having a quiet word in IIs ears, advising them to bag themselves a bargain.
I'm going to stick my neck out and say I think we are pretty much reached a floor to the share price.
I also emailed Investors Relations offering my opinion that they should begin a share buy back of up to 10% of the share capital, as approved at the last AGM, given FCF projections, debt maturities and the ability to hold the purchased shares in treasury which can be sold later when market sentiment improves. They said they would forward this and other shareholder recommendations to the Board.
*Jupiter reduce their position clearly because they don't think the SP is going to move up. *
Have a read back through the thread - the reasons for Jupiter selling are well documented and understood. Short version: the fund is in distress. Once they are out or have lowed to levels deemed acceptable this should bounce up to at least MM's purchase price - perhaps even higher.
DYOR/GLA
Looking at business now it worth more than doubled market CAP now. Business is in good position and then every data on sell good and expanding is ok . Only big fund sell off bring it down and only under 1.3 % shorted shares . Let it go iver next 6 months and come back to see how difference prive from now. .
Loss of value*
Think the question now is...
Is this just the usual THG kiss of value or is there still selling going on in the background?
I'm invested here, but it seems a bit desperate to try to interpret anything that happens as a positive push for the SP. Jupiter reduce their position clearly because they don't think the SP is going to move up. Even if we assume they are in need of money, they wouldn't cut good money for bad money.
We are stuck here on all time low and it seems we are going to stay at this levels (or lower) for some time.
Confusing why anyone would believe the 3rd biggest external holding selling would help SP
If we get an RNS that the shares have gone to a better holder, then we will rise
Otherwise it’s another worry surely?
Looks like those hoping Jupiter selling down would lead to a turn around in fortunes are disappointed so far.
And still below the 10 EMA.