The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
Now at a daily RSI of 12 - way, way technically oversold. To put into context the RSI hit 20 at the peak of the COVID bottom.
Https://www.cityam.com/tech-firms-listing-in-london-thats-a-red-flag-says-short-seller-carson-block/
Https://news.sky.com/story/greggs-working-on-overseas-trial-as-uk-value-focused-sales-surge-12975628
Impossible to predict where a stock bottoms out when it starts hitting all time lows. Definitely a long term hold from here and let the knife hit the ground first rather than attempt a catch imo. As with any stock, conviction in its business model and management team required.
GLA
To be honest I’m fed up of reading repetitive posts on here of people giving it the big ‘un about “results need to be this” or “I’m expecting nothing less than this” or “MM’s last chance saloon”. It’s all just the mutterings of over extended anxious traders who are hanging their hat on one day of results. If this is your strategy then good luck to you because you’re not gonna make it imo.
Seasonally September is a poor performing month for stocks globally with rallies more associated with Q4. If no capital event is announced alongside H1 results next week then this just sends a signal to potential third party suitors that the company is a sitting duck for takeover bids and accelerates the inevitable value unlock.
We don’t know why Matt gave up the GS 3 months earlier than required or why he liquidated a major asset (ICON) giving him access to substantial personal funds so all options are still in play at this stage.
Btw, am not a technical analyst but I took a look at TradingView and the daily RSI is now at an oversold level of 36 which is similar to that of late May after Apollo discussions were terminated so feel free to sell your holdings or short into that stat….
Am personally relaxed due to one key component that is different to previous times in the company history - the GS is gone.
It’s really simple, the SP value (as evidenced by an independent SOTP valuation and two previous bids) needs to be unlocked. Either MM does this (and am happy for him to get first dibs at this given it’s his 20yrs life work has gone into it) or if he is unable/unwilling then a third party will step in and do it on a hostile basis. Either way this is now coming to a head and shareholders will benefit so it’s now just a question of patience and letting it all play out.
GLA and have a relaxing weekend in the sun ☀️
@plutus1
Spot on and not only did he get the 50% to support him in turning down the Apollo proposal, he also had their backing to terminate discussions and not allow a revised bid to be submitted so whatever he said to them must have been very compelling to say the least. Yes he could’ve used the GS as a veto at that stage but I don’t believe he would go against the majority of large holders wishes if they wanted to move forward as that would just be storing up future confrontation and make things uncomfortable for all.
Https://www.cityam.com/friend-or-foe-how-uk-regulators-grapple-with-short-selling/
Https://news.sky.com/story/fears-for-super-soggy-superdry-as-shares-slump-to-record-low-12955008
Https://www.cityam.com/london-stock-exchange-boss-julia-hoggett-well-fight-for-everything/
@LM
Agreed, it could go either way at this point. I’ve always rated Julian and he can’t be blamed for a pandemic and subsequent cost of living crisis but equally saddling the business with high interest debt facilities is a deep concern. Am hoping he reduces the physical estate dramatically and positions the offering as a premium online brand. He’s now pulled on all levers of liquidity (sale of IP assets, equity raise, debt facility) so I hope he succeeds and gets to the other side of this economic cycle which will most likely be 2025 onwards.
The company reported an adjusted pretax loss of 21.7 million pounds ($27.46 million) for the year ended April 29, 2023, compared with a profit of 21.6 million pounds.
"Following the Christmas holidays, what is traditionally a slower trading period was exacerbated by the emerging cost-of living crisis and falling real wages, resulting in slower sales than expected across all territories towards the end of our fiscal year," it added.
I may be wrong but it feels like we’re building up to some announcement bigger than just H1 results, odd that we’re in September tomorrow and they’ve still not put the date on the financial calendar.
Like some others I suspect that THG’s fate is already sealed with Matt doing all the necessary prep behind the scenes over the past few months. It is coming up to the 3yr anniversary of the IPO and the headlines will write themselves if the business ironically delists from the cesspit - will be checking CityAM for any exclusives 😎
GLA
@mountainous
They have stated that the delay is due to RSM auditing them for the first time. Sdry’s previous auditor Deloitte resigned last year after stating it was a “complex audit”.
https://www.punchline-gloucester.com/articles/aanews/superdrys-auditor-tenders-resignation
Suspension due to delay in providing results not a good look but not worth reading too much into until they’re released. M&S are now returning to the FTSE100 having turned around the clothing business by shrinking its estate and closing large stores in city centres - hopefully Sdry does the same.
@justsomerandom
I’ve always believed in the mantra expect the worst but hope for the best. It’s difficult to ascertain what the balance sheet will look like so no point second guessing. I think more important than this will be the forward guidance provided as this is what the market will look for to value future performance.
Are we still sticking to the 60 day schedule of a plan spaced out in 30 day intervals to provide good optics to both the regulator and wider market?
21st June - GS surrender
21st July - Set up a holding company
21st August - …..?
hope so as there Maybe Beneficial Options that arise.
GLA and have a relaxing weekend
@hash
Yes it’s a win win scenario for Hilco as they profit regardless of business survival and swoop like vultures on companies in financial distress as they know they have to accept exorbitant interest rates in return for a chance of trading their way out of possible collapse.
What is confusing is that Sdry has £132m of liquidity from recent actions (£80m Bantry Bay + £40m APAC IP rights + £12m equity raise) and yet STILL needed this additional lending facility from a restructuring specialist. Their last trading update stated the Autumn/Winter collection sales were going well but then again in recent times they forecast £10-20m profit before reducing this to breakeven and eventually even withdrawing this guidance so who knows?
You don’t have to be Warren Buffet to read between the lines here, all will be revealed/confirmed at the next financial results update.
GLA