Member Info for Arealfundmanager

Believe me, what probably prompts Dowgate as an Institutional Investor to sell, is the concept of rebalancing their fund's portfolio. If you see a share price rise some circa 40% over a week, (even more if you look over the last month) it will probably become a much larger percentage of their portfolio than they target, hence the selling to rebalance. It is not solely about what they think of the price but the maintenance of the diversity of their portfolio.

Investors who are short are often Hedge Funds who are enacting what is called a "market neutral" or "relative value" strategy. They may be short Aberdeen , raising cash in order to go long another stock, invariably in the same sector, such as Jupiter for example. This way they are only interested in losing less money in Aberdeen than they make in the other stock. They don't care if the market in general goes up or down as it's the relative performance between the two (short stock SP versus long stock SP) that counts. Hence they can withstand what looks like significant losses if the SP of the company they have shorted, rises. 99% of the time shorts are a result of this. It would be a brave person to 'naked' short a single stock unless there was something terminal about the company. Hedge Funds do short indices if they are bearish on stocks in general. Other 'shorters' tend to be 'market makers' but they are usually only short for an extremely limited period, as the cause of their shorts are buyers taking stock off of them that they don't have, which implies upwards share price pressure.

The hit to US Q1 GDP in the first instance is a result of the contraction in government expenditure via layoffs and cutting back various government financed initiatives such as renewable energy projects etc. Private sector demand has not shown significant signs of contraction (at least not yet) . The labour market is still robust and even if consumer confidence is getting hurt by on again off again tariff talk, the real test will come via employment. So far employment has not suffered much, so consumption is not particularly threatened near term, and the public's consumption is roughly 2/3rd's of the economy.

Boom's results were good there is no denying that, but why the muted / no lasting reaction on the SP ?

* It was already fully reflected? - seems unlikely as it more than beat it's own forecasts from Q2 update and analyst expectations.

* Company was way overvalued anyway? - Again not particularly likely as similar companies trading on higher multiples, whether price to sales / revenue, price to book, price to earnings etc etc. UNLESS of course they are way overvalued too!

* Disaffected shareholders selling? - Possible with Bonnier, in fact I would say fairly likely. MM's KNOW this and can afford to let stock go as they know a ready source to get them from elsewhere. There are also possibly others who own stockout don't want to, or whom have bought at higher levels and are trying to trade themselves out of a loss making situation.

* Market manipulation by Candy? - Those who spout this idea I have to say "Don't get a job with Sherlock Holmes" your logic around his motivations are suspect to say the least. Apart from anything, market manipulation is a very very serious offence which risks a prison sentence in the extreme. Do you honestly think he would engage in that, by destroying value for his own holding????

* Market participants who use Hedge Fund type strategies to make money - Possibly, this is where short trades are employed to offset long positions in other stocks where there is perceived to be better value and company performance. This could be the case with longs in Acast and shorts in Boom. It doesn't mean Boom is doing badly just relatively less well, and can though suppress a share price beyond its individual merit. However this represents opportunity. [The analyst who compared them on Reddit, - who readily admits that Boom is undervalued - makes some heroic assumptions about likely progress, such as the inability of Boom to control costs, reflected in op. expenses per employee remaining vastly inflated compared with Acast for the next 8 years! Seems unlikely unless management are completely inept which they have shown not to be over the last couple of years, and the Board of D don't govern properly vis a vis the issuance of options which are expensed.]

* Posters who are on this board, just remember that a SP is determined by demand and supply, and the extent of turnover in the stock suggests that there is a ready supply, which will lead it to depart markedly from underlying value. BUT in my long experience eventually the TRUTH WILL OUT. Just be patient, the only investors who really make serious money are those who invest for the long term.

PS If you respond with any derogatory comments you will be ignored. Different opinions are what make a market.

Some of the chat, or indeed a lot of the chat I read on this board is laughable really.

1)The chairman buying stock is doing so because he feels this company is fundamentally undervalued, NOT day trading. If he were to do that I'm sure regulators would be scrutinising things carefully.

2) The company's fortunes being solely dependent upon the employment of a Chief Revenue Officer is ludicrous. If so why isn't he starting up and running a company himself? He's not, he is employed by someone else, elsewhere now.

3) The stock price falling recently is not because the company itself is doing so badly, although macro conditions are making it difficult.

4) This is what I would classify as a micro cap stock, a growth company, in a growth sector - tech. Have you seen how all companies classified as such have been performing recently, especially micro cap?

5) Higher long term rates are the basis for valuing such companies. Have you seen what is happening to long term rates recently? Higher rates = lower value of expected future cashflows, de facto lower share price.

6) There is nothing wrong with the running of the company in fact it is in pretty good shape for what it can control. What it cannot control is the macro economy as management keep referring to with respect to the weak advertising market.

Now never say never, that the recession which is really now upon us in the US, UK and Europe can last for some considerable time, and this company runs out of cash [that's why they keep referring to their cash balance :-) ] and goes bust, but I would suggest that there is plenty of scope for rates to come down and prevent that. Inflation is collapsing in most places, so should not be an impediment. This stock under those circumstances is amazingly good value. Day trading is a fools game. Think long term and you can make money. It's the only proven way, with decades of research on the subject.

I won't respond to anyone commenting on my remarks here, but having been a fund manager for 40 odd years and since retired, having been in charge of £200bn, yes billion, when I did, I think I have a claim to know what I am talking about.