Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
No he was the seller of the puts - so he has already cashed in by earning income from the buyer (who paid him a fee to enter the option).
If the price keeps going up nothing happens for MA. The put will expire worthless and MA will have earned some nice fees for selling the option.
Are out tomorrow morning at 7am. Consensus is for 0.2% growth month-on-month, but let's hope for another positive surprise after yesterday's inflation print.
Seems like the retailers are having a good summer so far. Fingers crossed that comes through in the data and gives the SP another leg up.
He's sold put options to generate premium income. Basically, it means he is bullish on the stock and is happy to buy from someone at the strike price (which will be lower than today's price). However, if the strike price isn't hit by the expiry date (Sept-23 for example) then the option expires worthless and MA has made money regardless.
For the put option buyer, it provides a floor on the price and protects their downside.
It's important to note that these options are to be physically settled if exercised, so MA has committed to buying the stock from the put option buyer (rather than paying cash to settle the difference in value).
I’m also happy with how the sample site is going, plus it’s creating a buzz on social media for the ASOS brand. I know someone mentioned it earlier, but the £2 charge for a return is an interesting strategy for the business. Perhaps they are trialling the policy on the sample website before rolling it out to the main platform?
Rabnesbit - you do realise that the current management are in the process of fixing the various issues you describe? They didn’t create them and I firmly believe they’re on the right path to righting the ship.
As the recent trading update alludes to - this is not a quick process but they are making great progress. So you just have to be patient and wait for the results to come, which I know many private investors struggle with.
100% agree West. Patience and a good understanding of the change agenda are the key to holding this. It’s very volatile, but if you get the fundamentals and how the business will look in 18 months, then it makes for an easier hold.
Time for Asos to move its listing to the US. Guarantee we would have a valuation in the billions if they did that.
I’ve mentioned it before but look at Wayfair. $7bn valuation with a worse balance sheet and losing money. It’s crazy how low the ASOS market cap currently is.
It's annoying that this NED sale has broken the SP's upward momentum, but it doesn't change anything about the business and the forward strategy.
Are they still selling hundreds of millions of dollars of product a month? Yes
Have gross margins improved 350bps YOY? Yes
Are they on track to reduce inventory by 20% at year end? Yes
Are they still forecasting positive FCF for H2? Yes
Is the business worth more than the current share price? IMO yes and I think it should be £10+ if it's profitable
All of the positives from the last trading update are still relevant, so I don't think we need to be fundamentally concerned here. Understandably, people want the share price to go up in a straight line, but this market remains brutal and investors are very jittery.
Any sniff that gains might be erased and people are selling up in a heartbeat. Which is what we are seeing at the moment unfortunately.
Hard to see a dividend here anytime in the next five years. ASOS will remain a growth company for the foreseeable future and once profits are back they will definitely reinvest for future expansion.
I still don't believe they've fully realised the true potential of Topshop and I can see a return to the high street in a few key areas (i.e. Oxford Street). This would create a real buzz in the market and help to lift the whole ASOS group in terms of brand awareness, etc.
Plenty of upside here and I'm definitely holding long term. We are nearing the bottom of the cycle and once the economy starts to improve, this should see a sustained rise in SP.
Here's the text of the email I received:
"We’re busier than usual at the moment – and this might affect how quickly we can dispatch your order. But don’t worry, we’re working as fast as possible to get it to you. Once it’s packed, we’ll send you another email with a tracking link so you can follow its journey right to your door.
Also, don’t forget you can download the ASOS app and set up delivery and returns notifications for your orders (plus you can get the deets on some exclusive discounts – just saying…)
We really appreciate your patience – thanks for shopping at ASOS"
@SavvyInvestor - definitely a genuine order and I was pleased to see the email, which hopefully means a good quarter is in store for the business.
I think a lot of consumers tightened their belts over late 2022/early 2023 (given all the doom and gloom around the cost of living crisis), but now they want to spend some cash again and retail appears to be benefitting positively from this.
Would love to see an unscheduled trading update which raises guidance for the year.
I did my bit last week and placed a decent order for some summer clothes. Got an email yesterday saying that the company was busier than usual at present but my order would be dispatched soon.
I’ll take that as good news while we wait for more official updates!
Fair point on the revenue growth but we should be at least back to book value (700p) given they're back in profit. There is no reason for a discount to the net asset value when you're making money. If you keep making money year on year then naturally the share price will increase over time, as the company is building equity in its balance sheet.
Absolutely Karl and I feel the same way. The most important thing for long term holders, is that the business will survive the bottom of this economic cycle and can ride the wave of growth when the rebound comes.
You definitely couldn’t say that last week. If they had made another big loss they would be in deep trouble.
Have to say I rate the current CEO very highly. He’s extremely sharp and knows exactly the levers to pull to get the business back on track. The analyst call this morning was impressive.