Marshall Wace LLP - now more out of pocket on newish short position10 Sep 2019 11:52
You may recall my highlighting of the detail below last Friday 4 September, on a day with maximum price of 115.3p.
ITV.L Marshall Wace LLP 27 Aug 2019 Open 0.50% 0.50%
Looking at the trading range for the day above, I'm going to use a £1.13 average price obtained as "seat of pants" estimate for detail unpublished, assumption trickling of that amount through as sales right through the day, quite a feat in itself. I personally am glad that the "cheap" stock has been so well taken up by investors with a contrary view of trading & M&A prospects over the past fortnight.
Based on market cap, you've short-sold something like 200m shares and received about £226m less expenses, if you start buyback at the current price you're starting at around £250m, ie the P&L at present is (£24,000,000) and rising.
I think someone (possibly on fee-based income) has presented you with a business case scenario of buyback at £1 per share a 13p per share profit, but respectfully if good luck and good judgement stays with my view you may soon be @ -13p (ie out of pocket) in only a few weeks.
Dealing with Brexit crash hopes and risk/return, Brexit spending is dealt with via a very interesting posting below and it wouldn't take much for 1. Overseas predator (not necessarily from USA) or more likely corporation or private equity to buy up another 9.9% during a short or extended GBP reaction. 2. Blackrock to be more nimble on short covering of their short of 0.57% which looks to still be in profit. 3. Surprise to the upside, business as usual but everything more robust that expected, given two years of pessimistic messages and a year of UK political downside.
Couple of transparency declarations to end - multiple 5-figure shareholder in ITV, not a client of Marshall Wace or its investment offerings. With hindsight, MW was wise up to the spring and has a good cash sum to prove it, though one is only good as one's last deal - such done at 113p is likely to be far less rewarding than one much higher. With hindsight given events later, I bought some of my stock too early at the 165p or so level, even with dividends received, but my averaging down around present levels was fully correct. I'm just essentially a retired WC1 analyst with reduced info and with many calls on my time, no 60h weeks to concentrate on one industry aspect any more, no crystal ball, but I do have the advantage of being outside of the London "bubble".
On an overview, UK creative industries including ITV Studios are thriving at present and its other divisions are well-managed for a cyclical downturn, digital income rising, debt not too bad and South Bank sale should assist, 180p new Berenberg target, lots more here from other serious posters. I'll continue to manage my own money now and do what my "handle" implies, including watching the cliffs, beach, yachts, ferries and occasional cruise liner. Hope this helps with an alternative view for my studious colleagues to ponder.
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