Member Info for alex1621

I think Naomi Campbell involvement is positive, as she is working in collaboration with African designers … so she’s a big name internationally, in the US in particular, and popular within the black community. I appreciate that she’s older than the demographic but the “supermodel” status helps a lot.

The proof of the pudding will be the success of the launch.

But more important than all of that is some indication in the forthcoming update that green shoots are appearing and headwinds are subsiding.

The economic situation is still sufficiently poor that short interest will not disappear. Major moves like falling inflation, lower interest rates and the end of the Ukraine war are the macro factors I’m looking out for.

My thoughts on Mike Ashley’s stake building is that he sees value in all of these retailers, and is buying shares at price levels that he views as extremely low. I don’t think it is about a takeover, but he might well want to team up in areas where the businesses overlap with his own.

But more important than any of this is the future updates. Are we about to see some green shoots of recovery?

Q. What happened at ASOS today that led the SP down 4% plus?

A. Nothing. The business operates as it normally does.

Same for Boo. The only way out of this pattern is improving updates, so that’s what we should focus on. Nothing said on here has any impact on the SP, but it does serve as a soundboard for investors … also known as rampers and conspiracy theorists by those with no holding who spend their day on here gaslighting the rest of us. You might want to ask what rational human being would do that?

The GameStop saga is of course an extreme example, but it demonstrates that "market" prices can be different from objective valuation ... due to the activities of actors with a wall of money to apply. But it's not just that ... the game also includes planting stories with journalists, trying to get companies investigated by authorities, and illegal activities like naked shorting (something that is widespread in the US but strangely is never looked at in the UK).

For retail investors I think the lesson is to avoid heavily shorted shares until the results begin to show solid signs of recovery, because with a wall of money being applied (and the other activities mentioned above) the share that you own can be driven into the ground. And there is no governmental authority or media organisation that is looking into that, so they can act with impunity. Matthew Moulding of THG is being portrayed in the media as a "loon" for calling this out ... but whatever anyone thinks of him, he's not wrong.

Wolf - "In terms of looking at valuations and relevance to SP you probably couldn't have picked a worse example".

A statement that makes no sense? GameStop is the most extreme example of a disconnect between an "objective" company valuation and the valuation assigned by the market, in both directions ... extreme undervaluation followed by extreme overvaluation.

The SP (on Boo Hoo) in particular does not reflect what investors THINK the valuation is, and that's the point I am making.

The SP reflects all sorts of things ... the level of shorting, market maker adjustments, stops being triggered and all sorts of algorithmic machinations ... and I question to what extent it reflects "ordinary" buying and selling by retail investors and institutions?

I haven't seen much evidence of institutional buying or selling. So the question in my mind for the last 24 months is whether shares like Boo, ASOS and THG are really operating in a rigged/manipulated market? I suspect they are, what other people believe is a matter for them.

The only thing that puts an end to that is, in my view, better trading performance. So that's what I wait for.

Hexam - market price seldom reflects valuation, if ever. Even regular companies not subject to shorting or pump and dump will be valued circa 30% higher in the event of a takeover.

My argument is with those on here who (for whatever reason) suggest that company valuation is whatever the SP says.

Hexam - markets are generally efficient, and in most cases you can relate a market capitalisation to a intrinsic value. But I'd say that mostly applies to shares that are not in the cross hairs of organised shorters or a pump and dump mob. GameStop is an extreme example, but it serves to illustrate a point.

T4G - no better illustration of that than GameStop in the US.

Hedge funds shorted more shares than actually existed (believe it or not) and the share price plummeted to $1. One extreme.

Then Reddit posters on the Wall St Bets sub-thread pointed out the potential for a short-squeeze and as retail investors (and professionals) piled in, the shares rocketed up towards $350. The opposite extreme.

At either $1 or $350 no one could claim that GameStop was correctly valued by the market.

Note: a movie is being released on 22 September 2023 called "Dumb Money" ... stars Seth Rogan, Paul Dano ... a comical take on the GameStop saga. Worth a look.

If I were to borrow £300m shares (for the sake of illustration) and take a massive short out on a random company then the share price would take a dive. Any company on AIM. No company share price would be immune to that. Many would sell in case "I knew something" , others would add shorts for the same reason. And many others would sell automatically because their stops would be hit. MM would bring prices down to reflect heavy selling.

If you had the means and the technical know how you could do it ... just for a laugh.

But what about the company? It would trade in the real world everyday just the same. It would be a case where the market price was disconnected to the "real world" intrinsic value.

Might explain Umar Kamani out-of-nowhere purchase?

If online sales have done well that would suggest the management are at the very least in-line with guidance, and possibly ahead. Only time will tell. Poor number for retail but not so bad for the online element.

The Umar Kamani investment is interesting, less so Ashley. The question is whether it will be viewed as a signal of better trading performance?

In todays Times business section, a quote from Sir Nigel Wilson, CEO of Legal and General:

“The world is dominated by algorithmic trading”.

Why are you here Pedro?

Why would anyone invest so much time and effort on a bulletin board about a share they have no financial interest in?

It's all very strange?

JeremyP ... where you and I differ is that you believe they are "genuine" people, just a little misinformed.

The question in my mind is why would someone, say Pedro, with no declared interest in BooHoo shares be on here morning, noon and night pouring cold water over any post that is positive or anyone who would suggest that the share is subject to any sort of manipulation?

Who would do that?

Some new posters today joined the perennial naysayers ... all of them believe that anyone who discusses market abuse is a "conspiracy theorist" (a term used to discredit the credibility of any poster).

Strange day?

I don’t think anyone in the regulatory bodies are interested, unless it impacts them politically. So even if you could produce a dossier with sworn affidavits from participants absolutely nothing would happen. They neither have the resources nor the inclination.

That’s what political donations are for, to keep you safe from scrutiny. And don’t expect a newspaper to be involved either, as most of them get their financial scoops from hedge fund and short selling sources. Check out the Wirecard documentary on Netflix, or buy Dan McCrum’s award winning book. His source was a self-interested short seller. They don’t bite the hand that feeds.

The Hut Group CEO was roundly mocked in the press when he complained about shorters trying to destroy his company. The one thing you could say about the IPO is that the section of the business that runs web sites for others was overhyped, and as a consequence the valuation was far too high. That much is true. But the fall in SP went way beyond that.

For anyone who doesn’t believe that share prices can be manipulated please take a look at the HBO Max documentary “Gaming Wall St” … you have a former Morgan Stanley employee acknowledging that he engaged in naked shorting “every day”.

No one is saying that the Boo selling price should never have fallen below £4. We all know that the company has been hit by a whole raft of issues … post pandemic supply chain, corporate governance concerns, economic downturn, inflation etc etc. We all know that.

However, anyone suggesting that a pack of hedge funds working in concert on an AIM stock can have no impact on the share price are either deluded or deliberately lying.

If Boo Hoo were a private company it’s valuation would have taken a beating over this period, but it wouldn’t be worth less than 10% of its former value. So how is that explained?

And my original point this morning is that in a bid situation the bid price would be substantially higher than it’s current trading price. And if that is true then SP does not reflect valuation.

The point made that a shorting team couldn’t suppress a SP over a long period is nonsense. They simply rinse and repeat. As long as the updates don’t show any radical improvement you can continue to spread fear and doubt through collaboration with journalists. I’ve lost count of the number of times I’ve read a planted news article followed by heavy shorting. And increasingly the articles are repeats of old news.

Unkooked - what is shorting if it is not suppression of the SP? It doesn't happen with private companies, but with public companies it affects the way other investors or lenders assess the company.

Shorting is often explained as a "bet" against the company, but that is a very poor explanation. I might bet that Manchester United beat Chelsea in their next game, so that is a bet against Chelsea. Now if I were "short" Chelsea I'd be spreading rumours about their centre forward having an affair with a stripper and running on the pitch to hit their goalkeeper with a baseball bat ... in other words I would be an active participant. The act of shorting is to drive the price downwards. But it also involves collaborating with journalists, writing letters to regulators, and doing anything to get a company investigated or driven out of business. You never see a negative article on shorting written by the press, because they are collaborators in sourcing stories.

As for market makers, they have a whole box of tricks in their armoury, so whilst they are necessary, they are no angels. The Naked Trader book had a section on the "tree shake", but there is more going on than that.

NGC01 - I’d bet that in a bid situation it would start north of £1. And if subsequent updates are in line with management projections higher still.

When it comes to share prices, there is the issue of psychological anchoring. Rolls Royce below 50p not long ago. If anyone had gone on the RR board and suggested it would be 207p soon and predicted to go higher they’d have been laughed at.