Member Info for BrokeNSmoke

Oke & Wolf - thank you.

I don't mind people making errors in information reporting as we all do it, but doubling down on spewing out factually incorrect information after being corrected is just frustrating.

I am signing off this board for a while as it doesn't do good for one's mental health.

'Ordinary People'. You are a bloody investor, learn some financial literacy!!!

Net assets are taken as a baseline because there is value in the business not recorded on the balance sheet, like intangibles other than goodwill. If BOO decided to liquidate, do you think they'd only get the figure on their balance sheet for their IP considering Debenhams was purchased for £55m alone? Its highly likely they'd get more than their current market cap for their IP in a sale.

I'm not replying further on the net asset issue because you are either dense or a troll. Stop posting factually incorrect information.

You are taking the argument down different paths now. You claim was the the RCF wasn't in the net assets, and I am categorically saying it is. This is a fact.

'And businesses are excellent at manipulating figures.

Why do you think you have the likes of REVB, Wirecard, Carillion, and so many more fraudulent accounts.

Never trust any figures and delve deeply into all of them.'

PP1 - Net assets are usually the baseline for the lowest a company can/ should go.

No they aren't. Accounts are prepared in accordance with the relevant standards, in BOOs case, international financial reporting standards, which mandate that both the asset and liability of the RCF be recorded into accounts to avoid off balance sheet financing.

'This is the problem with accounts.

They are used to make the business look better than what it really is.

Hence why it's so important to delve deep into the figures.'

PP1 - As mentioned in the other thread. The revolving credit will be included in the net assets figure, not in addition to.

I prepare accounts to IFRS standards as my day job. One of the few times I know what I am talking about here!

PP1 - The revolving credit is included in the net assets figure.

'T4g - it's not valued at net assets because Boohoo has debt and a £325m revolving credit facility.

Wrong again.'

No one can predict the bottom without hindsight but it does feel like we are there doesn't. Like almost down to net assets, investor sentiment at rock bottom and mass fear abound.

Well said Hexam.

I think the SP will recover with either improved profitability from BOO or some improvement in the macro trading environment, which ever comes first.

Then why hold? Why not cut your losses and invest elsewhere?

DC - I’m on the fence here, on one hand I feel like they should be concentrating on their core business and turning it around and the additional cash flow from the sale would be a nice to have. On the other, BOO has sold their products for a while, obviously saw how well their product sold and diversification into beauty just makes sense in terms of business expansion.

It’s a terrible time in the economy to do this, but that also means they get to play the vulture capitalist and get to grab the SP while it is basically dead. Extra risk but extra reward.

Re the telegraph article, I assume just dumping the entire article into one or several posts would violate LSEs terms here?

As per the rules:

'publish content that is not your original work, or infringes the copyright or other rights of any third party.'

Gaz - I guess its a bit of a mixed bag, high growth can fuel a bit of a positive feedback loop with more and more cash to grow faster so I think the growth BOO had Pre-2021 was laudable, and they wouldn't have accumulated such a good IP portfolio without it. That said, I would of preferred them pivot to conservative financial management with a focus on profitability over the last year and a bit when the headwinds became apparent. I still there is good value here though.

I'm happy to sit and wait at this price. Market cap basically @ net assets. Good IP portfolio. In my eyes they are laying foundations for the next boom. My main concern is them using too much cash/working capital that they might need in the future, like trying to purchase REVB for example.

I personally think this is a buy and will do well, but also its not a significant part of my portfolio. A bad side to BOO is that despite it being a small part of portfolio it, I feel like with all the ongoing drama it gets the lions share of my attention.

It will be interesting to see if Eleva reduce their short now as it had the feeling of them knowing something was going on behind the scenes here.

'Not sure it'll fly tbh ma brought more into ASOS and look what happened there.'

Unsure, I thought the 90m trades would have yielded a bigger impact than they actually did, but regardless, it seems to have put a stop to all the fear and panic that was out there at least.

'It stood a chance of going to 14p. I stated on Saturday I was waiting for a catalyst for shorters to exit.I stated that I would invest short term on that catalyst. This will be a short term investment.'

Serious question, why did you believe this from an analyst with a less than stellar track record and with the market cap getting close to net asset levels? To me it just seemed like fear mongering.

T4G - re the point on the share dilution. Basically you're right. I recall being very annoyed at the issuance of shares for the directors remuneration February 22 and 23 during massively declining SPs but I have relooked at the volumes and they are immaterial.

Hexam - agreed re the FCF sentiment, although I do think the reduction in old stocks and converting it into cash is an overall positive thing in itself.

Good luck!

'Surely those are not the only reasons for the steep and prolonged decline in SP? I would have thought the company now making losses and uncertainty over getting back to sustained and meaningful profitability are big factors.'

Its a myriad of things but from what I can see it is:

1) The rise to 400p was extraordinary, and likely would have been 200p-250p in this period without the abnormality of the lockdown.

2) The difficult trading environment for retail at the moment

3) Growth stocks are not favoured in high inflationary environments generally

4) UK inflation being sticky

5) Several controversies surrounding the company

6) Lack of communication from the company.

7) Constant share dilutions for reasons not associated with the equity being raised for further growth

We have also had all the other sh*t going on like the war in Ukraine, crazy headwinds and US banks crumbling. It has been a depressing time for most of us.

I think this is oversold, more because we are basically down to net asset levels of equity. Intangible assets are recorded in accordance with IFRS principles, so the goodwill of acquisitions which will have been getting amortised. I think its likely that the IP of the company is probably greater than the entire market cap at this point. Additionally, someone can correct me if I am wrong here, but the commercial properties haven't had a valuation in a while and are likely worth more than they currently appear on the balance sheet. I think if they were to voluntary liquidate the company and auction the IP and property we would be in the very rare position of extracting more cash than the market value of our shares are currently worth.

BOO have plenty of challenges ahead, but I am comforted by the financial position of their assets