Member Info for DC2007

It's opaque and tricky, like much of TCG's reports. But here is what I glean from it.

~ They said in May they needed £300m to ensure short term liquidity; that has now more than doubled to £750m. So in eight weeks, the amount they think is needed to keep the business going has more than doubled. Not good.

~ The creditors are totally in control of this now and Fosun will be subordinated to them.

~ The CEO portrays himself the weary reluctant saviour of the situation when all of this has emerged under his stewardship. How do they manage to carry off this schism?

~ If no deal is made, administration/liquidation will follow.

~ They are in sufficient disarray as to point to the the weather and the competition as causes!

~ Along with the D4E, there's vague hinting at something akin to a rights issue. This is the token sweet for the shareholders other than Fosun.

Conclusions
Unless D4E happens before October, TCG will be in admin at best, bust (liquidated) at worst. Admin or worse obviously wipes out current equity holders completely, D4E might leave a penny or two in the pound. As none of the likely possibilities will do anything for the equity valuation, the only reasonable actions are:

if you don't own it, don't buy it; and if you do, sell it.

Really jed? Are you now having a go a satirizing yourself?

In precarious businesses that are in trouble, volatile sessions like today are normal. For the short-termers, they'll be putting out the bunting. The underlying story hasn't changed. This is an opportunity for traders to seal in some profit, and investors to get out with slightly less heavy losses. Both deserve careful consideration before the moment's gone.

So why [Bkkbkk] did you repeatedly post 'do not sell' this morning? You sound frantic. Like you have too large a position in this and can't afford to lose.

Because the company is junk. That's what happens -- equity evaporates bit by bit until it's all gone.

You're joking right? Two different accounts, two different individuals.

My post from the 5th is still there. It was alamo55 who made the 'blind dog' statement and that post has gone. I didn't quote alamo at all, so yes, you are misquoting me.

Gareth: you're misquoting -- not something I ever said.

And for the potential airline sale [jed], that's £416m, rather than $520m, or comparison is misleading at best.

There were lots of buys including large ones before Debenhams, Carillion, Flybe... etc., collapsed. To infer that large/many buys alone to be positive is wishful thinking rather than good reasoning.

Again, not far below, reckless speculation that Fosun will offer £1 (per share) in a takeover. That's a premium of more than 7.5x today's valuation. When was such a large premium last offered for a takeover?

Does a business that has lost £250m over the last five years warrant a valuation of £1.5bn? How/why?

If a buyer offers £1.5bn, they are either: A/nuts; B/mugs; or, C/in the grip of sunk loss bias. Probably some combination of these in play, with a heavy dose of option C involved.

The reference to DEB is apposite. The similarity in tone on the board is striking and relevant: the wishful thinking means people are becoming desperate. They've stopped (if they ever did) evaluating the business with reason; speculation rules and individuals seem to think the SP will become what they want it to be by repeating it often enough.

Wake up! This business has not made a profit in years. Tourism has changed and modernised and TCG have not evolved. The brand is worth nowt. They are a distressed seller of a so-so airline. Even realising decent cash (£500m) for that leaves remaining assets swamped by the debt.

Equity buyers at this price should be aware of the high risk of losing the lot. Their only real shot is some mug coming along with a wild, emotional offer. Short term, the SP will probably convulse here and there; making anything from that is down to luck. Mid-to-long term, TCG probably won't survive.

Atb

alamo55 brings clear thought and realism -- a useful contrast to the poorly conceived unabashed optimism infecting the thread. Holders or buyers of common stock gotta be warned that large losses/total wipeout absolutely on the table for TCG. All the signs are loudly there.

Atb

How are you expecting day to day operations to reduce the debt? I thought it was still a year before they expected FCF to become positive.

Atb

It causes an emotional reaction but no one actually says where it's wrong. It's their job and has a better probability than not of being right. It certainly draws out barbs of the deluded and the wishful thinker.

Atb

It wouldn't surprise me if jedgambit said TCG owned a hotel on the dark side of the moon.

Good to see commentary questioning the various fantasists here.

Near zero is a visible probability.

The 17.22 post is certainly thought provoking, although it lacks much thought itself. It's a fluster of emotion and opinion and to be approached carefully:

~ "TCG are NOT going bust" -- how does the poster know this? It's opinion without reason or evidence offered.

~ "TCG are NOT...being controled by the banks," -- unless the poster is employed at a high level at TCG's lenders or TCG, how can they possibly make such a definite statement?

~ "airlines side has been sold off for what £800m - £1bn" -- nobody knows what the airline is worth until it's sold. Under normal conditions perhaps, but the seller is distressed and the market value realised will be discounted to reflect that. Valuing the airline given TCG's vague reporting is near impossible - what was the net profit of the airline for the last financial year? Based on such sketchy information, assuming more than £500-600m is precarious.

~ "Then we have all the assets which must be worth what £400m+ making about 65p-70p in total" - and the assumptions of asset value (without calculation) and suspect maths continues. If the airline is really worth £1bn (and group assets by implication then are £1.4bn+), why does the market still value the overall business at £230m?

The poster thinks they know better than the market; and that their unique insight into TCG and the tourism business is superior to qualified people with expertise. Why? Each to their own to decide.

Atb

Mine don't. Broker even sent me a nice little letter in the post to explicitly say the equity no longer existed. It's gone -- reversing it as impossible as a dead person being made to live again.

Atb

Definitely a stick-and-ball forming there. Good sign to pile in with what you can afford.

Atb

Agree the delusion here is stunning. Might be a different company, but the madness of crowds never changes its quality. People putting out the bunting when it rises a few percent, ignoring that it's shed two-thirds value in barely two months - if that's not an indicator of severe distress/risk, what is?