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The market has certainly rebounce today. Ocado up 35% after winning new business, Cineworld up 165% (well, this is a special case as it emerges back from near bankruptcy). Overall market is up, it just seems to me that the market is no longer that terrified of interest rate rise. If I the shortsellers decide to close their short now, that could quite easily push the price north of 400p.
The US tech giants can't escape from low consumer spending and have been reporting less than expected results (with Apple as exception). By comparison, Darktrace's recent result are superb, in fact, Darktrace's earning reports have never let investors down so far. Anyway, Nasdaq rebounce strongly including Amazon, Microsoft and Google. Darktrace is holding up better than I expected. I feel the stock market has probably bottomed ... (well, until the next inflation/interest rate data...)
Also, giving share is more tax efficient. You save about 28% of NI (employer+employee), you only pay income tax (benefit-in-kind) on the market price difference , and any profit when you sell them fall into capital gain with £12k annual allowance. It will cost the company a lot more for equivalent nett cash if done via PAYE.
Well said Dam0. Those who have worked as tech public company will know, giving employee share is a very common practise. In the 2010s, I was young and needed money to buy house, so I sold all my stocks as soon as I got them. That was a period where stock price was stagnant. Now I deeply regretted selling them. Shares is part of renumeration to attract new employees, and also to incentivise directors to work hard to make their shares more valuable. If a company does not pay out share, they will have to pay higher salary to attractive talent which will hurt the company's profit.
Ade,
I see the shorts as plus. Price has gone up roughly 25% since JPM shorted, they will close the short to cut loss if it keeps going up, which will push the price even higher. Maybe that is what is happening now.
Important thing is Kwarsi get sacked and mini budget is cancelled or watered down. One thing is for sure, Truss will not lead the party into the next election. If she is wise, she will appoint a puppet chancellor to continue the policy from last government and enjoy her remaining months at number 10.
oldgold,
Yes, share buyback will mean there will be £30m less revenue for this year, but the company did the same amount (if I remember correctly) last year, so the revenue growth rate shouldn't be affected much. On the other hand, the company has responsibility towards their shareholders, including us. From all the evidence of shortselling position, I think the shortsellers had limited capital in the region of under £10m, but they still caused huge damange in a down market, but the share buyback will act as a good deterrent. The £30m has the potential to raise the company valuation by hundreds of millions if not billion, I think it is money well spent.
Cyber security and digital migration – cyber attacks could be added to Mark Twain’s life certainties (death and taxes) and this remains the case, probably more so with Russia potentially aiming to attack more overseas assets. Add in the continuing shift in financial crime to the cloud and it is likely that spending in this area will stay strong. While further rises in interest rates have renewed the downwards pressure on tech-stock valuations, there does appear to be increasing stability. For cyber stocks one is still better off looking in the US listings at the likes of Crowdstrike (US:CRWD): the UK’s Darktrace (DARK) remains volatile but may attract another bidder.
Just did a round of check on Nasdaq stocks year to date performance. Apple is the best performing, down 24%, Microsoft and Google 30%. Many big names are down 60% e.g. Nvidia, Meta, AMD, Intel, Netflix... you name it. Even Tesco is down 30%.
Oh yeah, that sort of make me feel slightly better about Darktrace as I sold out all my Nasdaq stocks in the beginning of the year to buy Darktrace.
Lending, I bet even you haven't encountered market like this year. So many stocks are down 70%, 80% even 90% since the start of the year. The problems just kept coming - first is the fuel price, then strong dollar/weak pound, high energy bill, high mortgage rate. But the least expected was the mini budget which causes the collapse of gilt and stock market. The world need some good news.
Do not believe people say if you keep the shares long enough, you will surely be making money. Marks and Spencer is down 44% after 30 odd years. The loss is actually a lot higher if you factor in the inflation. For someone who invested on the first day, they will likely have lost almost all their money in real term.
The blue chips are dropping like growth stocks. I blame it on Tuss and Kwateng. Any saving they think they might give us from tax cute and energy cap is peanut compared to the increased mortgage payment and wealth (pension) wiped out from the stock market. US will release their inflation data tomorrow. If it is better than expected, that could buy us some time until end of month when Kwateng finally will disclose how he will (or won't) fund his spending. I hope he will resign and drop all his plan if he could not figure that out.