Member Info for JonHarris

Simon1367, just because a share is shorted doesn't necessarily mean it will drop, also looking at the dates of when the shorts were placed, the shorts are well in profit, as such a very strong case can be made that they will look to close their short positions while they are in guaranteed profit.
Having a short position includes having to pay fees, as such there comes a point where closing the short is preferable in order to maximise profits.

Also the comment on the CEO is a bit misplaced, you don't know their financial commitments, and the fact they have put their hands in their pockets is a positive statement.

The share is 82% down from last high, and 62% down YoY. So it's safe to say this share has cooled off a lot.

Name a fashion retailer with a stronger client base and market integration than Asos at the moment.

- Ukraine far from over
Putin will be dead in a few months, his own people will remove him as the power brokers if Russia have become global pariah
-Rampant inflation and consumers tightening spending
This benefits Asos as it removes the consumers that buy and return. And people will be shopping for bargains as such more likely to shop online than around stores.
-Compressed margins
Being addressed by the new CEO, Asos front loaded stock and supplies to weather this situation
-Global supply chain issues not yet resolved.
Once again Asos front loading stock, as such when other retailers start to run dry of product Asos will be there to embrace their customers.

The real area of consumer spending that is getting hammered is electronics. You can buy a device for a kid to last a couple of years, however they will continue to need new clothes.

Also look at the sheer amount of acquisition and takeovers happening. Let's me real for a moment, less than £1b to buy Asos is a dream, and less than £2b is a bargain.

- Ukraine far from over
Putin will be dead in a few months, his own people will remove him as the power brokers if Russia have become global pariah
-Rampant inflation and consumers tightening spending
This benefits Asos as it moves the consumers that buy and return. And people will be shopping for bargains as such more likely to shop online that round stores.
-Compressed margins
Being addressed by the new CEO, Asos front loaded stock and supplies to weather this situation
-Global supply chain issues not yet resolved.
Once again Asos front loading stock, as such when other retailers start to run dry of product Asos will be there to embrace their customers.

The real area of consumer spending that is getting hammered is electronics. You can buy a device for a kid to last a couple of years, however they will continue to need new clothes.

Also look at the sheer amount of acquisition and takeovers happening. Let's me real for a moment, less than £1b to buy Asos is a dream, and less than £2b is a bargain.

The shorts are only increased by very very small amounts, and I suspect they are doing that in order to create short term fear to lower the price while they can.

Unfortunately for the shorts everything is now starting to move against them:
Multiple director buys.
Share price the lowest in 12 years.
Asos are a much bigger and robust company with better market capture.
Now in the FTSE250
New CEO in place.
Asos have already addressed returns and implemented polices to resolve.

The shorts are on borrowed time, and I imagine the fees they are paying will soon start to look like a drain on any realised profits.

Once again, just need one bull to enter the store and all hell will break out and the share will jump in a made frenzy to get any shares.

All it takes is one large firm to buy £80m worth and secure a 10% position, this leaves only 20% free-float outside of major holders, which is a very dangerous place for shorts.

I bet there are some shorts starting to sweat now :)

In the face of a market contraction Asos are one of the few retails that can stand to gain market share.

A few more fashion retailers and Boohoo go bust as Asos take the gold metal

If there is a potential for a takeover, then the CEO buying too much stock might look suspicious before it's officially announced *winky face*

He still is putting his own money in, which is far better than a lot of CEO at the moment that are not buying their company shares with the prices down.

Also, read up in the CEO, the guy is very sensible, which is what you want from a CEO and also given the nature of the market currently

The BoD are loading up, the major share holders also loading up.

And the shorts are starting to get scared.

Time to a re-rate!!!!!

If a fund offered less than £3b to acquire this company it would be a slap in the face.
The shorts have had their fun, now let's set them on fire ftse250!!!!

If I was a fund with a billion sat around then Ados would be a great takeover target.
The company was making £100m+ profit, so would not take long to recoup expenses and have a juggernaut of a company making mass amounts of revenue and profit.

Could see a big US fund eyeing this up, and doubling down in US growth targets. Equally middle eastern funds are hovering up western companies while they can.

I don't think people realise how cheap Asos is now.

Purse strings being tighten is a good situation for ASOS, this means less people ordering random stuff and wasting Asos time and product.
Adding the return charge, plus consumers making more defined initial purchasing decisions means that Asos will have less returns and therefore better profit margins.

The price has already declined to way below fair market value based on the worst potential.

As other high street retailers will struggle due to costs, Asos will be less affected and having their store open 24/7/365 and running direct targetted sales to maximize revenue.

Now comes the time for major holders and institutional investors to kick the life out of the shorts.
Looking forward to waiting the shorts rush against each other to close position and realise profits.

The market makers still have to trade with the market to hold shares. The UT of that size is a MM getting ready to close shorts or hold to sell back to the market over the next few months.

The next six months I'm putting any spare cash into stocks of solid companies that have crashed this year.
Lots of options to hold a diverse portfolio of great companies, wait a year and double or triple money.

Right now is the best time since March 2020 to load and hold.

There was a UT trade of 4m shares on the 17th June 2022 after close if market on a Friday.
The last time there was a single buy of that volume was on 7th April 2020, which was a Friday, and the price jumped 80% on open Monday.

History repeating, golden opportunity

The bull market started in November 2021, this was a delayed bull market that ironically COVID March 2020 stalled, because the drop then was a united market collapse on a defined event.
So we had the decline start in November 2021, and then the Ukraine conflict starting this caused the next event market crash, and since then have continued to fall.
The recession is here already, and the housing market will crash next as the credit be limited going into the market started in real force in March 2022.
As such, yes we should see the market broadly crash further, however Asos had already suffered most of their expected fall and their new future focus statement was just conservative confirmation by the incoming CEO, and frankly he's just done that to save his and senior staff from too much blame over the next few months given, however I suspect they have gotten a handle on the returns already and have set the bar low to look amazing when they hit a high profit margin in the next updates.

I think you have to take Asos in a broader context like Tesco or transport, that although the market will be tough, as they are now part of the market landscape as an essential operator, this means revenue will still be generated and the company focus is on optimization.
Considering the new CEO has been with the business for a year and over that time had gained a great understanding of how to improve their margins, this is a great sign as a matter of key resolution.

Secondly to that the fashion market has changed, with Top Shop out of the picture (now owned by asoa), Boohoo loosing brand appeal, and a generation of people between 0-35 that know internet clothes shopping as a natural part of life; This puts asos into a very dominant position.

The US expansion is going well, and once again, Asos are heads and shoulders above alot of US retail. As US retail is still lead by dinosaurs.

If Asos can show a bit more control on production of clothing to improve margins, and continued US expansion, then looking at a fair value market MCAP of £3b within a year is feasible.

O know what a UT is, it means you had a buyer and sell agree a balanced price.
However £44m compared to the past trades in massive, so I would suspect that someone in the background is building position or having stock on hand to sell to shorts to close.

Looks like a short closing position:
17-Jun-22 16:35:12 883.50 4,985,014 Buy* 885.00 887.00 44m UT

The shorts knew what they were doing and that a slightly dull company update would drop the price so they could capitalise before the share enter the FTSE250 where there will be less volatility.

Classic last ditch attempt to use fear to make money. The share was already down to fair market based on expectations, and the drop yesterday was orchestrated to make major returns for the shorts.

However it appears it might back fire with BoD buying £400k worth of stock and a major holder increasing their position by 1% of total shares, looks like the short need to cut fast or get done by commissions and charges and lose money.