Member Info for Compoundinterest

Most Recent M&A activity:
1) In April 2020, Emma Sleep acquired by PE (Haniel Group has agreed to purchase 50.1 percent of Emma) https://tech.eu/brief/haniel-buys-emma/

2) In Jan 2020, Simba raises €21.5 million by PE Cartesian Capital (thetimes.co.uk/article/simba-sleep-bundles-up-us-deal-to-fund-global-growth-ztzgxh5nd)

3) Eve and Simba merger proposed in September 2019 but later (https://www.thetimes.co.uk/article/online-mattress-makers-simba-and-eve-sleep-head-for-merger-dpz7q5rqj)

With recent statements reported from Emma, Simba and Eve confirming sales targets outperforming during Covid-19; this provides further conviction and opportunity of possible M&A activity to consolidate this sector as competition remains fierce while PE are looking for undervalued but strong managed companies in these low interest rate environments. DYOR

Upbeat with confirmation from Emma and Simba's showing significant rise in online e-commerce sales. Generally across the board, e-commerce will continue to do well despite shops reopening, Covid-19 has given a leg-up for consumer habits shifting to e-shopping. The saying goings a rising tide lifts all boats. With 7.5 mil in bank, gives it the confidence and acceleration to outperform.

Eve sleep is IMO in the best situation it is financially than it has ever been in the history of its establishment. Yet it is valued inversely compared to the days of when it was valued at 100mil+... now it has turned a milestone with positive steps towards profitability; Downside risk is limited with 7.5 mil cash in bank, 3 mil market cap... upside potential is relatively significant. The doom and gloom of survivability is already priced in to the current SP with forced selling from Woodford; so I think at these levels, it substantially undervalues the company. DYOR.

These prices are IMO are a Bargain and I don't think we will see these levels again in the next few months. Jupitar is clearing the overhang from the small remaining shareholdings they have left. I can only see this trending upwards with limited downside risk from here on. DYOR

End of the day the share price is completed disconnected from the company's actual value due to Woodford forced selling of over 40% of this company. A bit of interest from any serious buyer, could be PE, M&A, wealthy individual would drive this in a completely different direction. 3 mil market cap VS 7.5mil in bank with limited cash burn per month seriously under values this business.

Agree Lemming. Unlike the high street burdened with extremely high operating and rental costs and reduced traffic due to Covid-19; retail will struggle. The consumer behaviour will continue it's shift towards e-commerce and Eve Sleep is in a great position to capture increase in market share with limited overheads.

Well spotted! Thanks Firex. I suspect Peel Hunt acquired the shares on the cheap @.08p - 1p for Woodford escape and gradually over the past weeks sold for a modest but decent short-term return. This shareholder structure is pretty good for any interested acquisition or merger. https://investor.evesleep.co.uk/aim-rule

Cash burn 100k per month from the days of losing millions per month is a significant direction and path to profitability. IMO the market is dislocated considering share price was 50x this level not long ago. Just proves they are starting to do the right thing with marketing. National TV adverts are working successfully with sloth dance... I think they should continue. to build on that great idea and tweak it here and there rather than reinvent the wheel.

Seems they need to do more on with Amazon promotions (Emma, Casper and Simba dominating), Google SEO, and get listed on John Lewis for credibility as next step up to generate higher returns. Hopefully gone are the days of wasteful advertising on London tubes etc.

With Woodford gone... any serious interest will turn this share around.

1) Cash 7.5 Mil- Market Cap 4mil - Brand equity written off at this level.
2) Marketing Campaign a Success (Sloth dance)
3) Casper, Leesa, Sealy Major USA competitors EXIT.
4) Pure Online Play... "leg up" for e-commerce. Consumer habits shifting online
5) Woodford seller OUT!

IMO - Acquisition/Merger makes economic sense with the likes of Simba, Emma or offline retailer transitioning online.

Jupiter Asset Management still holds 4.5% (12,135,603 shares) worth about £150k. This last bit of overhang will very soon be history. I hope new CEO and directors can increase skin in the game; so their interests are further aligned with commercial success. Time to walk the talk and turn in to a profitable business.

As predicted continued downward selling pressure from institutional investors wanting to exit. Expecting initial 30-40p until positive news. Great company but investors are returning cash to investors or just derisking for recession like scenarios. Here's the historic source of selling and expect more sells especially from Link Funds (Woodford):
Lansdowne Partners Limited Below 5%
Link Fund Solutions Ltd 11.96% 13,091,131
Richard Griffiths 5.94% 6,500,000

Covid-19 forcing companies to prioritise home market and conserve cash to survival mode. Although Casper, Leesa and Sealy exiting relieves a bit of pressure from competition. Eve's major pure online play competitors are still pretty significant with Emma Mattress and Simba Sleep as leaders in this space.

But seems new CEO is optimistic- read this (https://www.marketingweek.com/eve-cheryl-calverley-becoming-ceo/) and summary below:

Calverley has stepped up to CEO at a difficult time for many companies as the coronavirus pandemic continues to impact business. Eve has been “lucky”, she says, because it has few fixed overheads and sells primarily through ecommerce. That means many people in the market for a mattress are naturally finding their way to Eve Sleep. “While demand is depressed because everyone is sitting tight not knowing if they have a job, the demand that is there is coming into ecommerce so it’s quite a good time,” she says. “It’s a black swan moment for ecommerce and some of the categories that were slightly behind in the transition from bricks to clicks, it’s going to rapidly accelerate that. It gives it a real leg up.”

All major US Mattress companies are EXITING UK and Europe to focus on USA. Great for Eve!
1) Casper - gradually exiting UK and Europe "Casper winds down European operations and lays off 78 people"
2) Sealy - ww.sealy.co.uk "Deliveries due for Friday 27th March and onwards will not be fulfilled"
3) Leesa - "Leesa is no longer fulfilling orders or operating in Europe. "

Firex - agree licensing Eve's brand could be the only feasible and low cost pathway to US but.. it's pretty much brand rebuilding from scratch in new market so I can't see why someone wud go down this route unless the licensing agreement is really good terms for the buyer. As for acquisition.. hope so, but can only hope haha.. I try to write-off this possibility and focus on value. The fact is 8mil in bank and market cap at 3.5mil with sufficient cash in bank is all that matters during these times.

Eve is not currently selling in the USA so it's weird there is an article based on this. IMO it would be suicidal for Eve to launch and sell in USA right now. Casper and Purple etc dominates significantly there; Eve would need a lot more money than current cash in balance to make any meaningful dent in the US market.

The trend being online is an old story, the shift in sales from offline will only increase the piece of pie and market share for Eve Sleep as they are pretty much a pure digital player. Covid-19 with everyone staying in has only accelerated consumer habits to buy mattresses and furniture online.

The 900k & 500k transaction was in $USD currency. Not seen that before. US buyer perhaps?

https://www.londonstockexchange.com/exchange/prices-and-markets/stocks/exchange-insight/trade-data.html?page=1&pageOffBook=0&fourWayKey=GB00BYWMFT51GBGBXASQ1&formName=frmRow&upToRow=-1

Strong buys towards the end 500,000 + 810,098 shares. That million or two overhang from Jupiter shud be out sooner or later.

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Samkk- well its not over yet is it so game is still on.

IMO- Previously they were spending marketing excessively on a pretty inconsistent and poor marketing campaign . Now with Cheryl Calverley, ranked pretty highly in the marketing world (Sloth campaign is a success) promoted to chief executive of Eve Sleep, there is hope.