RE: Re Takeover speculation26 Oct 2014 01:46
Leonasdad - I have no idea where you are getting your information from, but quoting a prediction for Tesco's market Cap to equate to a valuation of £700,000 is beyond ridiculous, and quite laughable..
Despite the recent troubles in falling sales, market share and profitability they still own a sizeable market share equating to 28%.. I have a lot of confidence in the new CEO - Yes, it's going to be a while for a turnaround, but they are addressing they key issues and after he has set out a clear strategy and share with the wider market, this will only have a positive impact to the current SP. The current book value of Tesco assets is very sizeable, the secondary businesses outside the grocery market are valuable and they are still the UK number 1 retailer, therefore please stop writing nonsense in your posts.
Traders value a company on both book value, assets, future growth expectations, profitability and speculation... it's not just a number, its the combination of allocated shares x market price based on the principles I've outlined.
Anyway, this is a JS BB and the current Short positions equating to 11% is quite considerable, especially given most of the companies behind the shorting are hedge funds. My expectation is that they are unsure on 3 things, as Xmas trade picks up, how strong competitions within the market is going to impact margins and of course profitability. Secondly, given the recent accounting issue with Tesco, whether this is a grocery wide issue and JS may have similar issues. Thirdly, overall concerns surrounding the retail industry as a whole.