Member Info for Dawson_64

Let's see if I have got this right. Your function on this board is to find every bit of bad news about the company and helpfully post it on here so the natural exuberance of holders is restrained. What do you get out of it? Perhaps it's just your natural desire to help.

Are the short positions being reduced? It is still at 13.3% (peaked at over 19%) but now it's only the 5th most shorted. None of the hedgies are making any money on this at the moment while the share stubbornly refuses to crash back to �2. How much longer will they continue to shell out for dividends and loan fees? https://shorttracker.co.uk/ While CLLN is reporting a 1billion pound loss MRW is buying back debt. The MRW short position made sense during the dismal Dalton years but looks inappropriate now.

It is part of the ongoing debt reduction during the Potts reign. See 18th Sep RNS for "Rationale for the Offers" "The Offers are being made in the context of the Company's ongoing focus on debt reduction. The Company intends to use its strong liquidity position to reduce the level of gross debt outstanding and the resulting interest expense."

I think there is a probable connection with the announcement of sale and leaseback and the increase in short positions. Look at the shorttracker graph. https://shorttracker.co.uk/company/GB0006043169/ In late 2013 the short interest was just 3.88%. Articles started to appear in January 2014 in relation to raising cash through leaseback. http://www.thisismoney.co.uk/money/markets/article-2538057/Struggling-Morrisons-sell-lease-stores.html The plan was formally announced in March 2014. This announcement allied to the fact debt had soared to £2.8 billion attracted the shorting hyenas that this may be a company in trouble. Management appeared completely hopeless at the time with no real idea of what to do. The M-Local, Kiddicare disasters etc By December 2014 short positions were up to 8%. It peaked at 19% in October 2016. (Only disclosed positions above 0.5% appear so the true percentage would be higher). Morrisons did previously have poor payment terms which is another of the markers the hedgies may use to target weakness. This was mentioned by a fund manager in relation to Carillion. "One hedge fund manager told the FT he had been shorting the stock for a couple of years because Carillion had failed to agree invoices or pay them quickly. “When we see payment terms lengthening it’s a red flag and that’s why we shorted it,” he said." Despite the Germans being given a free pass to disrupt UK grocery while the majors indulged in financial suicide the current forecast looks a lot brighter. Debt has now shrunk to under 1 billion and there was an announcement of a tender offer on Monday to further buy back loan notes. A cash strapped company won't be able to do that. Shorting is certainly no longer a one way bet. Try calculating the average sell price of the hedge funds MRW position from shortracker info and you'll see that a lot sold short at prices way below the current level so they cannot close now unless they want to take a loss.

It is surprising that Orangetree failed to mention Morrisons commitment to paying all small suppliers within 14 days. https://www.kamcity.com/namnews/uk-and-ireland/supermarkets/morrisons-to-pay-smaller-suppliers-quicker/ Maybe he has too many companies to keep an eye on and cant follow all news.

"Morrisons saw improving earnings in the last three years, most are down to selling and leasing back properties this process contributed £280m to earnings when compared to £924m in underlying earnings. " This is no.1 of the Orangetree three reasons - ie using sale and leaseback to plug holes in profits. First off it is not really like Tesco. There the percentage of freehold got as low as 50% whereas it is still above 80% at MRW. There was also the small issue of the SFO levying fines on Tesco because of dubious accounting, is there any such claim at MRW. Orangetree mentions a figure for "underlying profit" but according to the MRW accounts that method of stating profits does not include one off property sales so how is profit being overstated on that measure.

Not an accountant but the shorting started under the previous management when it looked as if the company was in a death spiral of falling sales and constant reverses in strategy ie opening the m-locals, then shutting. Starting Kiddicare, then offloading. Not at all impressive. Would the company on more recent performance really be a shorting target. In many cases the current short positions are underwater and they cannot buy back without taking a loss, so they continue to hold. With regard to the specific point of depreciation of assets it is dealt with in para 11.7 of the annual report https://www.morrisons-corporate.com/annual-report-2017/static/downloads/Morrisons_AR_2016_Web_Full.pdf Is this such an unusual treatment that it prompted 400 million+ shares to be sold short.

Just how "imminent" is the profit warning July, August, next week? Or is it just a throwaway remark of no value by someone annoyed they got burned on a short trade.

Indeed the yield figure is nonsense. It very much reads like someone who bet on red when the answer came up black. How about pension deficit as a fundamental yardstick? Or percentage of freehold properties? What about free cash flow? Sainsbury has been negative every year for last decade since capex so high. Morrisons much superior on that metric recently. Why would MRW be particularly impacted by a falling pound. Surely SBRY with its higher non-food will suffer import costs more than a company which imports less. There is no mention of the MRW food manufacturing capabilities. If you make a lot of your own food you don't pay a middleman and you don't import as much. That part of the business alone was mooted to be worth 1.5 billion a year ago according to an estimate here https://www.just-food.com/analysis/how-amazon-tie-up-will-strengthen-morrisons-in-food-manufacturing_id132622.aspx. Without that edge from manufacture you don't get the Amazon tie-up. I would have thought SBRY management may be a little distracted from the core food retail bit what with Argos and now NISA.

Me no understand... Vol Sold = 2,728,953 Vol Bought = 5,338,956 Price is down 4.8p

With regard to price movements one thing seems certain the old idea that price moves are determined by whether there are more buyers than sellers seems to have decoupled completely. The earlier poster only complained since he couldn't make money from shorts but there is illogical price action the other way too. eg at the moment Buys outstrip Sells but the price is down. The price movements are often the opposite of what logic would anticipate. Any ideas why? Perhaps the Buy/Sell volume records are incorrect .

Good performance so far on ex div day. It must be those market manipulators.

Just in case there is any doubt that it is not possible to make money from online grocery at the current level of delivery charges here is Dave Lewis of Tesco unusually reluctant to comment: Lewis said he was “quite happy” with its online grocery performance, but when asked by Retail Week whether the home delivery arm was profitable, the Tesco boss responded that it was “heavily sensitive information”.

Since nobody actually makes any money delivering groceries then a failure for Ocado wouldn't actually harm MRW profits since there are no profits being made. In fact that would just leave the wholesale arrangement with Amazon which definitely is profitable since MRW don't have to deal with the unprofitable delivery bit.

I preferred it when the market makers were supposedly manipulating the price higher....

I picked BT at random. Today SOLD=7,622,068 BOUGHT = 18,071,296 and price is down, I even see that Morrisons had a fall today and more buys than sells. Is MRW any more unusual than any other share with regard to buy/sell trades?

That MRW+SBRY merger possibility is discussed in the Times today. http://www.thetimes.co.uk/edition/business/sainsburys-ripe-to-merge-with-rival-x9cw2skpp A merger between J Sainsbury and Wm Morrison could be triggered by the proposed £3.9 billion tie-up between Tesco and Booker, Bank of America Merrill Lynch has suggested. "Sainsbury’s is the best candidate for consolidation and its geographic skew to the southeast fits in with Morrisons and Asda, the broker said. “Although Sainsbury’s differs from both Asda and Morrisons on concept, it is slightly more similar to the latter, making Morrisons the more likely candidate,” Merrill Lynch, a former corporate broker to Morrisons, said. Shares in J Sainsbury, which bought Argos last year, rose 2½p to almost 257p, while Morrisons fell ¾p to 237½p. Merrill Lynch’s comments to clients came as it emerged that Morrisons had looked at a tie-up with Nisa, the convenience store chain three years ago, according to a source. Talks between the two were well advanced........"

So we should feel sorry for shorters? They pick on companies which exhibit weakness and try and manipulate the price lower so that they can profit. MRW was certainly in that category when the debt was almost at £3 billion and previous management was trashing sales and seemingly clueless on strategy. It doesn't require a mm conspiracy theory to see why it's a lot more difficult for the short positions at the moment. That's 5 successive quarters of like for like sales increase, the company pension scheme is in surplus, just this week the company bought back over 200m of debt. The new management gives every impression it knows what it is doing. The short positions have to be bought back or they will have to keep shelling out for their loan fees and dividends. Or they just tough it out if they are sure they are correct - but feel sorry for them, I think not.