Member Info for Kando

I'm not yet invested, but I also agree that it looks not unlikely to, at some point, move back towards 25-30, possibly within the next 10-18 months. The problem, however, is that I suspect there's going to be some poor quarterly figures coming out of Boohoo (and perhaps also ASOS) in the meantime. It might mean there's a little more downside to ride through in the next 2-6 weeks, so I'm trying not to be in a hurry to buy just yet, as appetizing as the price already is.

Yes, it's little more than a guess, but I think it might pay to wait and see whether it tests that historic support level nearer 1000p (2011 and 2020) before it begins to mount its recovery. Obviously it's already tested 1250 but I'm not overly confident in calling that the bottom. If Boohoo posts their first quarterly revenue contraction in their June 16th update - which they might, since they're forecasting "low single digit" growth for the year and it's not impossible that one quarter might stray negative, then it wouldn't be unreasonable to surmise that the last quarter might well turn out to have presented the biggest combination of headwinds of any - if all that, then I think ASOS will invariably be dragged down a little further with it.

Looks like a couple more companies have signed up in the last week:

https://www.artdeco.co.uk/
https://www.puritanspride.co.uk/

The former looks like a fairly well-reviewed german make-up brand with 750,000 followers on FB: https://www.makeupalley.com/brand/ARTDECO/Brand=1701/reviews
The latter an established US brand selling vitamins and supplements: https://www.consumeraffairs.com/health/puritans-pride.html

Seems like exactly the sort of brands THG naturally would be looking to attract. With the marketing expertise/influencer network already used across the Nutrition and Beauty divisions, I imagine companies like that are most likely to sign up to the full Ingenuity product offering.

"If what you are saying is true, PE will be all over this bidding £2.50 plus, not just coming with cheap £1 plus offers."

No, that's not what it means. If that is all true, most PE will know they can't afford the price it would take to buy this. Private equity are tightening their belts the world over in these market conditions, many having taken fairly heavy losses on the last few year's worth of investments. A lot of the big boys have even publicly stated that they are assuming more defensive postures and not looking at acquisitions. It's unlikely that many, if any, are in good enough shape to afford the price it would take to be successful here.

"MM may take it private for 250p should no one offer that."

So you keep saying. It must be so inconvenient that that's not what Matt has said. He has, however, talked in the last Results presentation about maximising shareholder value. £2.50 is not maximising shareholder value.

"I for one would be very happy with £2.50."

That's fine, but you'd be leaving a huge amount on the table. £2.50 values the company at £3bn. Currently, revenue is 2.2bn with (this year) 35% YoY growth. Forecasted growth (in spite of all the prevailing macro headwinds) is still 25% YoY growth going forward - that's revenue doubling every 3 years. Management have stated they also expect the business to turn cash neutral going into next year, and cash generative after that, with capex falling. Even if you take all of that with a huge pinch of panglossian salt, and they only achieve half of that, a 3bn valuation is absurd. You'd essentially be selling it for what will be 1x revenue in a year's time... how could you possibly be desperate to sell at that multiple?

If, and it's a ridiculously big if, this goes private (because it's much more likely that it won't) - and if, and it's an even bigger ridiculously big if, this goes private for £2.50, you'll have sold your equity for peanuts against what may, in 3-5 years time, be a valuation 10 fold where it currently sits - given similar multiples for similar sized companies growing at similar rates. You'd sell for £2.50 in 6 months because you can't wait 36 months for £10? Where are you going to put that £2.50 per share short term windfall where you'd outperform the investment you could have simply left in THG? What other undervalued (and formerly unloved but increasingly less so) companies are growing at 35% YoY in this environment?

If you don't believe it's worth £10 in any future permutation of revenue/earnings/bull market/bear market, then fair enough, but if that's so, then you ought to sell now, and not wait for a buyout that isn't coming, least of all at £2.50. Your investment timescale and value estimation doesn't seem compatible with the much more likely trajectories of the company and the share price recovery that's underway here.

You say "The sooner the better." and that underscores the short-termist mindset of the scores of new 2 week old posters here - they all showed up when they heard talk of takeover bids being bandied about, but have no idea what they've invested in or why, just that someone wants to buy it and they want to flip a small profit. But they don't know the company, its prospects, or the ownership. So they don't have a clue why £2.50 rings so ridiculous.

Ahah, you two are back. 250p. 250p. Did one of you mention 250p? Yeah...?

No. Sorry. It's not being sold for 250p.

"It is the latest in a series of governance grievances to rock the business. These include Moulding's golden share, which allows him to block takeover bids. "

That golden share that all shareholders are delighted he still has? That golden share? And we'd want to vote out MacDonald for his part in a bid that raised the share price, why?

Off they go again, just so upset that they're not getting this company for the pittance they thought they'd engineered. Every hitpiece is more desperate than the last. No, he's not going to give his golden share up before it naturally expires, or until the share price recovers to a defensible position, whichever comes first. And no, shareholders don't give a two hoots who put the bids in; they're designed to bait out the bid of the actual PE behind this 10 month smear campaign. I'll vote to re-elect if only to spite them. If moulding him wants him to stay, I want him to stay.

"POLY (Gold) The world loves Gold.
EVR (Steel) The world needs Steel to build."

That's true, but the world doesn't love Russia. You must admit you're gambling on the world forgiving a country that's trying desperately to join the North Korea-level international pariah club.

Just to fact check you a little bit. Their sites still seem to be Ingenuity. The sites are the same, as per Google site archives, as they ever were. The only difference is that they appear to be redirecting their product purchase links to lookfantastic when buying. So they're just consolidating their shop into lookfantastic. It's clear they're still a client, hosted and shipped via THG. So no, they haven't left ingenuity. It's not entirely clear what made you think they had, or what your reason for claiming so is, but it's just false, hence why there's no news about it.

Boring ol' Binky.

Yeah it's crazy that. What are the chances someone else thinks he should give up his golden share and sell it for 250p?

Matt should be so eager to sell the company he spent 18 years building for little more than 1x revenue and less than half the IPO price and less than a third of ATHs a mere year ago. What an eager beaver he must be to do just that!

It's a shame the company has over half a billion cash in the bank and 25% YoY revenue growth at or the eager beaver Matt must be would be able to sell it for even less! I bet he's ready to snap their hand off to make sure the share doesn't recover past 600p in the next 18 months - because why the hell would he want to get richer?! Crazy.

"The numbers will do that in time"

I agree with you there.

But this is about getting the boot off his neck. Someone has been paying for hit pieces in the press. Someone has been manipulating this price down for 10 months. Somebody really wanted him to surrender his golden share (a big topic in the aforementioned firing squad by editorial). Somebody wanted this company on the cheap and were willing to go to great lengths to get it.

So now Moulding is baiting out that bid. If he does nothing, they carry on pressing, and the hostile party suppresses the share price until his golden share expires, then the company's more or less handed to them on a platter, shareholders exasperated at, by then, 2 years of a share under siege, will give it up for peanuts. Instead, his friend bids, the share price goes up, other parties bid, the share price goes up, and it baits out the central villain in all this. They're forced to show their hand because suppression of the share price will not work for another 16 months. They will have to go now or never.

"You didn’t answer my question , why would MM get his mates to put indicative bids in at 170"

Share price is going up, innit? Why would he possibly want the share price to start going up? It draws out more bids... all of which keep the share price going up.

It's training wheels for the market. The market (care of 10 months of co-ordinated negative press) decided that the company was impossible to value and therefore valued it at... nothing (0.5x revenue and little more than cash in bank). The PE bids guide the market back to a more accurate valuation. That process has to start somewhere, hence, the "indicative non-binding bid" from a close friend. Draw out more bids, none of which he has to accept, and share price keeps going up.

"Kando - I think your wrong and this is going private at a low ball offer . Why would MM get his mates to bid ? My opinion"

Cool. And just out of interest, who paid you to have that opinion?

"Any talk of £4 take private bid is farcical, that is far to much of a premium to market value and pe and MM will not pay that to take it back . If MM and PE are to take this private it will be for a massive discount to the float price otherwise MM may as well stay listed where his holding is liquid and funds are easier to raise . I personally think MM and SoftBank plus the big holders who are in now will take out the small investors for around 2.25 -2.75 but I could be wrong . My opinion"

Glad you're finally starting to understand why this is staying public.

"Not unless they change theirvpremium listing plans for later this year. They can't go forward with those while the Golden Share is in place. It's by the by anyway as this will be done and dusted soon."

Except that's obviously not going to happen while the share price is down at these levels. Matt would be insane to cede that veto to hostile takeovers while the whole company is available at 1x revenue. Premium listing will come, but only after that golden share expires - organically, or the share price recovers to defensible level - whichever comes first.

"Year September golden share given up ? 3 years ?"

Yes. 16 months left on the golden share. Which is more than enough time to ride out the weakness in the markets. It'll be back at or near ATHs by then. No reason at all to take it private at the first bear market it encountered. The opportunity cost to Moulding alone would be enormous, billions in equity lost. All current shareholders, institutions or otherwise, know the value potential here, hence why they invested to begin with. They've no reason to run scared. Going private will stymie this company.

Yes Rodney. This board has become a "going private" echo chamber. And not just going private, but going private as cheaply as possible - a la 250p. No shareholder should want this, yet all the new members do. Like the same journalists who were paid to peddle how worthless this company was for the last 10 months, saying how impossible to value Ingenuity it was, how much of a crook Moulding was... now saying it's worth exactly 250p, now saying that Moulding would surely accept 250p. It's the same people paying for the wall to wall coverage in here. "It's going private"..."I can't see it going for more than 250p"... ad nauseum.

It must be so frustrating to them that Moulding has the golden share. Hence why they attacked that so much too. He isn't selling it for peanuts, and he gains nothing from taking it private himself. All the noise in here is just that, noise.

"Seriously, I don't get why you are here if you don't expect M and A activity as that will be the primary driver in the short term."

I literally just said that it was the primary driver in the short term...
"The speculation will be the engine for driving the share price up in the meantime"

"Ok, there will be no takeover or buyout. You win. Best sell as if that doesn't happen there will be a drop in the short term."

Or... just hold to realize far value...? Why would anyone sell? It's not a binary outcome.
And no, it wouldn't just drop back to lows. It had bottomed out naturally, and started to recover before any speculation regarding bids. We've had FY21 results since, and a healthy forecast going forward. The market had already begun to reprice the stock before any bids were made or acknowledged. I'm not saying anyone should categorically rule out taking it private, I'm just saying it's not likely. And anyone here on this trifling forum pointing out that it's not likely, isn't going to change the outcome one way or another, one iota. It's just discussion. I think I'm allowed to estimate that it's not likely, and I'm also allowed to point out to other users that being bought out for 250p is probably one of the worst outcomes out of a multitude of better ones.

But yes, I agree with much of what is said here, and don't mean to sound stubborn. I simply disagree with the prevailing sentiment around the end goal for Moulding. I ultimately don't believe he will take it private. The bid he would conceivably accept would be beyond what any of these private equity players could conceivably afford.

"The market just doesn't see it that way"

It doesn't matter how the city sees it. Ultimately it only matters how Matt Moulding feels about it - given the golden share - and no-one here should be speaking for him. He hasn't said anything. The press have purely speculated. In the FY 21 webcast he was quite phlegmatic about the whole thing. At 77 minutes, he seemed more content to pluck on, and let the numbers do the talking, acknowledging that the market had changed, but not the company. To me, he sounds happy to hold, and like everyone else, is probably delighted to watch all this noise about bids and PE drive the share price back up. It's win-win for him. He doesn't need to say anything. Let the "unnamed city sources" say what they like; concoct whatever narrative they need; assume whatever price they can pluck out the aether that Matt would be happy to take it private for. He knows he doesn't need to sell, and he'll know it's in his best interest not to. The speculation will be the engine for driving the share price up in the meantime, and the more credible the speculation sounds, the higher it'll go. Then in the long term, the markets will recover, and THG's growth numbers will be that engine again.

I still very much doubt it'll be taken private.

So why take it private when they can just wait, and let the company and value proposition do the talking? What exactly is the advantage to taking it private, when all they need is patience to see a SP recover to many multiples of today's price? What's the rush to take it private?