Member Info for alex1621

Shein look like a classic private equity off load to the City. I think they have some major hidden issues ... slave labour and where they source their cotton. Not to mention the exploit of de minimis rules when selling into other countries. As a public company you are more vulnerable to attack.

I don't know if Lex are merely speculating or they are picking up murmers from some insiders, but it is a strange article to just make up?

Interesting times.

I think you can read the article from Twitter. Without subscription.

Go to Twitter and check out FT Lex column on Shein. I’m not sure how to cut and paste.

Suggesting London listing and private holders selling at a 30% discount.

My BooHoo takeover theory might not be so outrageous. And the supplier angle might be to shift from political issues re slave Labour cotton.

He'll be laughing on his own, unfortunately. Those that get their thrills taunting people rarely hang around, and the rare one that does turns into a revisionist historian ... "I always knew ... blah, blah, blah". In my experience.

JCB - I understand the sentiment but I doubt Ashley will make a takeover bid. It doesn’t appear to be what he does, so no one in the City expect a takeover bid.

As ridiculous as this sounds today, the SP getting back to where you bought it and beyond is not impossible. I bought 888 at around 56p, only to watch it crater to 28p, followed by an analyst report with a target price of 14p. A couple of years later I sold for around 180p. It went beyond £4 at one point. It reversed quickly on better updates, much more rapidly than anyone would have expected.

I'd rather see a turnaround in the numbers than a takeover attempt, because when the sector picks up the SP will rise sustainably. At the moment I wouldn't get excited about SP increases without business specific news to underpin it. The drift back comes as no surprise.

The Red Sea impact on containers is a problem, but not one that is likely to last. The Times today quoted analysts at Deutsche Bank who said there was enough capacity in the container shipping industry to cope with the logistical challenges in the Red Sea, with freight rates expected to fall as shippers and customers adjust. Moody's Investor Service said that ample ship availability and soft demand are offsetting inflationary pressures. I think we are nearing the end of the Gaza war, so this might soon fade.

As for Shein, I can't see a smooth post IPO period for them. I expect they will be attacked by politicians for exploiting the import rules and all the issues that have plagued BooHoo apply to them with bells on ... they are much more vulnerable to these attacks. Things can change very quickly.

There have been lots of casualties in retail and other sectors already, it’s the nature of cycles, and this particular cycle has been quite brutal. I recall Taylor Wimpy at 8p at the end of 2008. At the time you’d think the house builders were finished, but 8 years later it’s at 186p. At 8p no one believed that would happen.

It’s a strange phenomenon, the course of cyclical stocks. They cut out all the fat to bring their cost base down, and then benefit greatly when the cycle turns. Always difficult to predict turns but usually begins as interest rates start to get cut and economic growth picks up.

No one cares about any of this. The City care only about the numbers. As do I. Much talk on here about Shein from those that want to talk down BooHoo, but they seem to forget that Shein are much worse than any of the European online retailers when its comes to these issues. So if this is an issue, it's an issue that's much worse for Shein.

Not a bad theory, I think something is going on, I’ve just no idea what.

I do think that the Shein IPO will get off the ground … as money is involved, and in the US money talks. But it won’t take long for them to be relentlessly attacked by the short side. Another possibility is that the advantageous import regime is withdrawn or altered in some way. There is no question that they will face challenges as a public company.

A very lively board today, fighting the battles of the past. When the shares were riding high the PLT purchase looked wise, but doesn’t look wise when the SP has significantly fallen over the last couple of years. But then every business unit has been impacted, not just PLT.

More interesting news for me is the Shein move on suppliers. My purely speculative theory is that after the IPO Shein will look to purchase Ashley’s stake as a precursor to a takeover. And Ashley will buy Debenhams off them. I’m probably wrong but can’t help thinking there is more to the Ashley purchases than meet the eye.

Hexam - yes, that's pretty much my view also. The SP moves we are seeing, up or down, are largely irrelevant unless underpinned by news about the actual business. So that's what I will be focussing on going forward. I don't care about moving averages, the charts, etc ... or the drivel from trolls that plague what would otherwise be a decent board.

In terms of Rolls Royce I recall a fairly bleak range of opinions on the company's prospects, worse than Boo. Lots of Motley Fool like commentary on why they wouldn't touch RR, etc. Not unusual when a company has a sharp fall in its market cap.

Hexam - the point was that Rolls Royce is described as a prodigious and profitable £30bn company, and so how could anyone compare it to Boo? But no one was calling it that when it was trading below 40p, we only know that in hindsight. When the numbers began to show a sustainable turnaround, the SP multiplied in a fairly short time period.

If Boo were to show a similar turn in its updates, the multiples could be even higher. It's not Cineworld. But of course time will tell. And I have time.

It’s the small size that is significant. Rolls Royce has multiplied 8-9 times from the lows. And it is a big company. Smaller companies can multiply more if they start showing good results. It’s hard to imagine, but it can happen.

I've said this before but will say again. I won't get excited about positive moves in the SP unless it is supported with an update that shows stability and the prospect of growth.

The company is vulnerable to a takeover approach so no harm in speculating about that as a possibility, but I'd rather see improved trading and stability. Until then there is no reason for shorts to clear off. Many of the post pandemic supply chain issues are beginning to level out and the economic prospects are beginning to look improved, so fine to be optimistic. But no point in being over excited on the SP.

Spideystreet arrived in Oct 2023, Bon_Scott in Sept 2023. Probably sick of being banned under the old troll name.

Ironically calling out people for aliases.

Deja vu.

I'll start celebrating positive movements in the SP when it is backed up with positive updates from the business. That's the only basis for a sustainable upward movement in the SP.

Having said that, those that are cashing in 30% gains may regret not hanging on for a little longer. If the numbers begin to show improvements there is no knowing where the SP will end up. It went from 25p to 266p between 2015 and 2017.

Psychological anchoring can be a problem because people focus too much on the SP, and can't imagine bounce backs of that magnitude. But they can and do happen.

Wolf - I did. But it still doesn't help me understand what Fraser's end game is with regard to BooHoo?

Is it partnership, takeover, speculative investment, or bag carrying for an eventual offload to Shein and purchase of Debenhams from them afterwards?

What is significant about losses being slashed is that it is accompanied by increased sales at Debenhams. If sales continue to grow losses will disappear to be replaced by profits. The point is that Debenhams is moving into profit.

BFD - I'm patiently waiting for some indication of stability in the numbers but I am not expecting to see that until the second half of the year. The SP has fallen far steeper than anyone imagined, but it can do the opposite under the right conditions.

It went from 26p in May 2015 to 266p in Jun 2017. A pretty remarkable bounce back. Anyone making that prediction in May 2015 would have been laughed off the board.

I’m not that optimistic about the May update, although I expect it to be in line with the guidance range. Retail has been tough in recent times and I don’t see any upside surprise from BooHoo in May. However, the economic trends that were impacting the trading environment are reversing, so I am more optimistic for the second half of 2024 and the following year. Should future updates beyond May show stabilisation and growth I’d expect quite a jump in the SP.

The Debenhams update looks very promising.