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I have just been reviewing the changes to the rules and they are extremely significant, so much so that the rule book is being rewritten for the existing segments of the stock exchange and there will now be only one set of rules for all companies, the process started in 2021 and is due to be implemented from July 1st this year.
So a 3 year process. that seems to my recollection to be a year late in implementation, however the change are widespread and it’s no real surprise that there has been a delay to the perhaps optimistic timeline.
THG of course falls into the companies effected and the work undertaken by the company to separate the divisions and to have clear financial accounts for each opens up many possibilities.
THG currently has market cap of 1 billion give or take, the top company in FTSE 250 has a MCap of approximately 4.5 billion with the bottom company having about 200 million. ( will be out a bit since i looked some time ago), so we sit somewhere in between.
Currently we have no index type funds holding the shares of THG and when i asked on here the number that will have to hold THG a couple of weeks ago i got answers of approximately 5 to 15% of the share capital will be purchased.
This is IMO very significant as if we have 65% of holders holding firm ( which i have no information to doubt), there is about 500 million shares up for grabs, of course some held by readers on here.
So if 10% of shares need to be held by various index type trackers and so on , that means they will need to hold around 150 million, and if only 500 million is up for grabs then we might see some fun.
The changes will come into effect on the 1st of July with a 2 week setting in period and then business as usual.
IMO its going to be a very interesting time, in the run up to the 1st of July will funds buy THG or will their mandates restrict buying and conversely how long will they have to get to their ‘requirement’ 3 or 6 months? i have no idea but it does suggest that there will be steady buying coming soon.
It will also be interesting to see if MM and the board go ahead and stay listed on the FTSE and get much wider share ownership that is currently in place.
MM and the board have been waiting for this change in the rules , they saved a lot of money waiting for them rather than joining the premium listing as it currently stands, i think we have lots to look forward to as the changes occur and there will be considerable opportunities for the board to consider.
I could be wrong of course but it’s fun to think about it.
Interesting times ahead and i for one won't be selling
GL to all
@canary if your research is right that is big news. Let the front running of the index funds begin!!! Poor shorts
@canary, I know these changes have been in the works a while, but when and where were the official changes published, and are the timelines for implementation firm? Keen to read up. Feels massive for unloved standard listings that have been the playthings of the shorts. I believe S4 capital is in the same bracket, where I also hold shares
Some reviews that i have ben reading, including the one from the Ftse, the consultation has gone on for a few years and will almost certainly go live as i posted..interesting times.
https://www.sullcrom.com/SullivanCromwell/_Assets/PDFs/Memos/Major-Changes-UK-Listing-Regime.pdf
https://www.dentons.com/en/insights/articles/2024/march/28/proposed-changes-to-the-uk-listing-regime-ftse-indexation
https://www.lseg.com/content/dam/ftse-russell/en_us/documents/policy-documents/ftse-faq-document-uk-listing-regime-and-ftse-uk-index-series.pdf
Hopefully the listing update will be closely followed by interest rate cuts. Will certainly make for an interesting summer 🤞🏼
Thanks canary, will read those reviews with interest. Just for clarity though, is the 1st July now a firm date for the changes, or does it all still need to be ratified and implementation date confirmed? 100% agree with your analysis, if tracker funds have to buy from the 35% it could get very interesting.
Thanks canary..interesting and exactly what these forums are useful for..
Cheers C3, great post 👍
@canary great post and don't forget about 6% of the shares are held by shorts under the 5% radar. Interesting times ahead :)
Hopefully provides a boost to SP. But what would it take for SP to get back to 200’s or 300’s? In my mind its buyout or separation -but- could it incrementally get there on positive macro + being in + cashflow? As in could there a fundamental re-rating by market and what would cause that? A strategy update would be helpful
Canary, great posts ... thank you for the info. Much appreciated and with 23 likes so far it seems many agree :)
Great research @Canary it’s a game changer no doubt about it. Add that to all the other internal positives & Macro environment & we could finally see SP continue this move upwards.. GLA LTH
MM would be wise to list TH-Beauty as a separate listed company and with its prospects should command a similar rating to W7L when THB starts turning out real EPS
So you guys still have strong belief in the LSE? The CEO has lost hope himself guys and these hedge funds aren’t going anywhere….
He has lost his hope ? Why does he continually try t9 fight from inside it then ? I think he wants to prove that he was "right" all along rather than taking it private
Canary, thank you for the research, insight and for sharing.
There is a totally ridiculous column in City Whispers today with a bit about whether Moulding will rant about the shorts increasing their positions in THG. It reminded me that on top of your funds, the shorts have 1.92% to close (declared above 0.5%), plus others below that declarable threshold.
I believe that the director buys, TGL appearing in a podcast with his niece (that he could have done ages ago), Matt being the subject of a future episode and the lack of commentary on what’s happening in terms of listing status, is all carefully choreographed, to get the news flowing ahead of change. After all, Matt did say ….. let’s see what 2024 brings.
Im holding tight. GLA.
City Whispers link:
https://www.thisismoney.co.uk/money/investing/article-13407533/amp/CITY-WHISPERS-Bill-Ackmans-cerulean-eyes-charm-Woodstock-crowd-Berkshire-Hathaway.html
Apologies Crafty, I missed your post about shorts.
Does this mean there are 6% below 0.5% + 1.92% above the 0.5%? So 7.92% to be closed by shorts?
People were commenting that the finance director buy must mean that nothing material, not known to the market currently, was going to happen in the near future….. If all this stacks up, as the information is all in the public domain, it looks like it just means that the Directors have been very shrewd, locking in shares now, before changes in the summer.
One of the main reasons for Shorting is not because the company is failing it's because Hedge funds/PE are preparing the way for a takeover. Darktrace is a recent example where shorts were being opened right up to the day of the takeover announcement. The fact that Apollo etc have been circling THG forthe past two years reinforces my view that the shorts a being paid to keep the share price down. JMO Adyor!
Yorek Last time the full list of shorts was disclosed here it was about 6% under and 2% over. I am assuming the figures are roughly the same.
So unless anyone can prove otherwise I am happy to say there are still about 6% undisclosed shorts under the threshold.
Couple this with Canary3's informative post and there could be a real shortage of THG shares this summer should MM drop some positive news before or at the AGM :)
Another good example was Pets at Home, the Hedge Funds spread hundreds of rumours about the imminent collapse of the company about 5 years ago and drove the SP down from 500p to about 80p, it all turned out to be a pack of lies spread by US based Hedge Funds, the company just got on with delivering great results and increasing dividend payments and subsequently the share price rocketed to over 400p. Nevertheless, the Hedge Funds made many many $millions trying to destroy the company and a lot of shareholder's panic sold because of all the bad news stories being created by the Hedge Funds and their media mouthpieces. JMO Adyor!
Does anyone have any further insight on timing/detail of the rule changes Canary posted on. We know they are likely coming, but I couldn’t find anything in the public domain to say we are anything other than deep into the consultation process, with implementation likely at some time in H2. Canary seemed more bullish than that suggesting confidence in 1st July implementation? Any extra insight appreciated if anyone has it