Member Info for alex1621

Shein is an accident waiting to happen. When it lists on a recognised stock exchange it will be attacked by short selling hedge funds ... too many skeletons in the cupboard. Built up with PR pre float, to get the SP as high as possible, then relentlessly attacked.

I read similar articles about Rolls Royce over the last couple of years, especially. When the SP fell heavily. Motley Fool writers are as influenced by SP as the rest of us. Same with City analysts.

Since Rolls Royce was a “barge pole” stock at 38p it has since multiplied almost 4 times!

But no one ever goes over articles from Motley Fool and highlights how often they get things wrong. Glencore was a “barge pole” stock at 80p in 2016. But would have been a 7 bagger 7 years later.

But of course, that can never happen to Boo Hoo?

Source: Politico 29 June 2023

"French economy Minister Bruno Le Marie asked the French fraud and consumer protection authority to open an investigation into "fast fashion" companies, specifically singling out Chinese giant Shein"

One for the Shein fanboys on here ... enjoy!

I thought I’d cheer up the many Shein fanboys on the board.

Could there be a US and EU crackdown?

Source: CNBC

Just saying.

AIM companies SP can be manipulated easily by groups of hedge funds. I'd recommend the HBO MAX tv series "Gaming Wall St" ... a must watch for anyone who genuinely believes that market prices are simply the result of honest broker buys and sells. The fact is that manipulation is rife.

The THG CEO has been slated over his statements, by the media at large. But what he is claiming isn't wrong. I was an ITV shareholder when Liberty Global took a 9% stake. A little later they entered into a derivative arrangement involving Goldman Sachs, who also took a 9% plus stake (with derivatives I believe). The SP spiked on takeover rumours, but over the next 18 months or so it ground down constantly to below 60p. Liberty Global then stated that they held the same stake but at a much lower SP? I don't understand the technicalities but it looked like a legal way of maintaining your stake whilst lowering the entry price. And that is a large FTSE 250 company. Anyone who doesn't think manipulation takes place is either disingenuous or isn't paying attention.

Serious answer ... I've seen plenty of director buys in companies that performed poorly subsequently. Serious question - if things are so bad why no director sells?

The truth is that any rumour of a takeover would send the SP soaring, in the same way that we saw at The Hut Group. ASOS is now a more riskier short with all the takeover talks and stake building, so that shorting money gets applied to BOO. Hence ASC and BOO going in opposite directions.

The economic background is improving but is still murky enough to support the overwhelmingly negative narrative that's been playing out for the last 18 months. This too, shall pass.

Justin Waite never watched the presentation. He simply took recent past and projected forward ... if he had done that on the pandemic numbers he'd have forecast fantastic future returns ... which is an indication of how unsafe predictions are ... but if it serves your narrative ... fill your boots up.

Problem with Justin's analysis is that he's looking in the rear view mirror and using the recent past as a guide to the future. If he had applied the same numbers to pandemic trading BooHoo he would have concluded the diametric opposite, i.e. great future returns! And he'd have been wrong ... as we all know.

I watched the webcast yesterday and didn’t get the impression of a business that is failing, quite the opposite:

- the management team looked confident, like a group of people who know they are close to turning a corner.

- the next half will not be great but if it is better than they are forecasting then I would expect a great deal more interest from investors, and more confidence in future prospects.

- not too surprised about SP as there was a wall of money trying to bet against the company … it’s a legal scam that is routinely applied against companies whose results are poor.

I don’t spend much time on here, or the other main bulletin boards, as they are polluted with trolls … who really should be ignored.

Focus on the results to come, not on the heavily manipulated SP. A lot of idle talk about takeover, but I don’t get the impression that anyone at Boo is looking to sell when they are turning a corner.

On that point, just an observation. If an announcement was made today of “talks” with a PE company the SP would immediately soar. How do we reconcile that fact with the current SP, which is supposed to reflect an accurate valuation? We can’t, because the SP doesn’t. So don’t fret about SP ups and downs, focus on future updates.

Not a great day for those that want to project the last two years into the future. Listening to the webcast and the discussion regarding how headwinds are abating … still room for shorters to make money as H1 will be a continuation of current … a little more dangerous second half and beyond.

BooHoo beat forecasts on revenue, adjusted EBITDA and cash position … so whilst it has been a terrible year the results are a little better than expected.

The CEO simply pointed out that, despite the difficult period, the company have increased UK market share and overall sales significantly since 2020.

Other comments from CEO:

- supply chain inflation headwinds ease

- progress in reducing overheads

- inventory down 36% = £100m

- medium term goal is adj EBITDA of 6% to 8% and double digit growth

The first half expected to be poor again on revenue, with revenue growth coming through in H2.

Don’t expect to see significant return to growth until 2024/25.

We all know that BooHoo has had a terrible couple of years, but the indications from management is that they are close to turning a corner.

So maybe not such a turd after all?

I don't think we shall see much recovery in the Boo Hoo share price until we see some normalisation in the factors that have been a drag on performance ... post pandemic supply chain issues, inflation, consumer disposable income and confidence. If Boo Hoo can get through this period it will benefit greatly from the recovery. If you review the history of many retail stocks it is not unusual to see periods when they are hammered by markets ... Next being a classic example.

I don't expect much from next week's update but I will be looking for some indications that the factors impacting trading are showing signs of easing.

Umar Kamani has a wide range of external business interests … better to have someone focused and dedicated running the PLT division. So might actually be a positive.

Many talk on here about Shein as if the industry is a commodity market, like iron ore. If you want to buy the Megan Fox or Kardashian collections you won’t be able to buy on Shein, ASOS or any other retailer except Boo Hoo. Fashion retail, even in the value sector, is a differentiated product. Next is a well managed company but it doesn’t operate as a monopoly … it has plenty of competition from Inditex, H&M, M&S and many others. There is room for many competitors in this space.

Boo Hoo is suffering from the post pandemic shock coupled with poor corporate governance … with the trend in every important variable going in the wrong direction. All of which leads to a gloomy consensus. I recall something similar post 2008 with the UK house builders, who were on their knees. But trends change, and when they did these companies multiplied from their 2008 lows. It is always darkest before the dawn.

And as I’ve said several times before, those who predict imminent collapse are never around during these times. Those that disappear when a SP climbs only to reappear if it falls later are not worth wasting any time on.

My only real disappointment is that the current numbers are not above expectations, given that retail wasn’t as hammered over Christmas as expected. But given the delivery disruption (also highlighted by ASOS) then perhaps that was understandable.

The forward statement was more encouraging, and despite his many critics the CEO is controlling the factors that are within his control. Moreover, the factors outside his control are showing signs of easing.

The reason that I hold is that I believe that Boo Hoo will be a lean and fit business when business conditions begin to turn. Like airlines and holiday companies currently, we might well see a surge in sales as the world comes out of its current malaise. We are not there yet, so I don’t expect much fireworks in 2023.

Pretty much agree. No idea what SP reaction will be but this update was pretty much in line with expectations … with some green shoots looking forward as the factors impacting the business begin to ease. A few months back I would have expected a worse outcome. The company has a long way to go yet, but I don’t expect major positives until back end of 2023, going into 2024.

Daytradenovice ... no, I disagree. This is the stock market and anything can happen ... pandemic, nuclear war or some other calamity ... so you have to be open to all eventualities and leave yourself in the game if something unforeseeable happens. The professionals don't do this, so neither should the retail investor. Set sensible rules and stick to them.

Agree with comment on Motley Fool, not opinions that I would rely on. Best do your own research and come to your own conclusions.

But if you are fully invested (no spare cash) or your holding has reached your individual holding limit (e.g. 5%) then not investing makes sense, even if you view the stock as a bargain. Have rules that you are comfortable with and stick to them.