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Thank you.
The earnings (ie profits) vs royalties (ie pre-tax income) is a good point, but it would still leave between 60 to 80% of it.
And approx 10-20% off through legal and litigation funding, so around £110m to £145m approx: 70% to 100% of the current marcap approx.
https://www.investorschronicle.co.uk/news/2023/01/06/nanoco-shares-leap-after-samsung-settlement/
£219m
($10 per TV, 26m TVs sold since 2015, so $260m)
Conservative estimation from Peel Hunt.
Trying to guess the short term, in the absence of major immediate events, is a bit of a mug's game.
However, at a push, it looks more likely than not that the SP will retrace a little (5%? 10%?) due to a very substantial rise after the company actually reported bad results, even though it did announce cost savings measures - which fueled a fast big rise,. Right now, the sales show it is a company in decline. Any return to growth is a "jam tomorrow" promise, not a data-based fact.
There is a clear support zone at around 580-605 which might be where the SP would settle for a little while.
Two things to take into account as to the likelihood of a takeover in the near future:
1- the price of borrowing money: rates are higher than they were last summer, so any M&A decisions will be more cautious. This is not an incentive for a takeover.
2- profitability: Darktrace has just become profitable (albeit marginally), which means that as an acquisition, it is more likely to start paying for itself than requiring more cash injection to stay afloat. This is an incentive.
On balance, I SPECULATIVELY think Darktrace is a little more likely to be an acquisition target than not, but the picture is definitely not as clear as most try to claim here.
I echo everyone else - there is no delay yet.
The only very short-term drawback is this afternoon's publication of the minutes of the meeting of the Fed from 14 December 2022 which are very likely going to confirm that higher interest rates are here to stay longer (Jay Powell said something along those lines last month already). That will put 2 x as much pressure on this share as:
1- higher interest rates means govt bonds pay higher % so equities get sold, and
2- Darktrace explicitly mentioned that its figures were adversely impacted by a the higher USD.
Both those things will put very short-term pressure. But short-medium term, things are looking good for the share - the fact that it's become profitable (albeit marginally) cannot be underestimated.
Do you appreciate you are now partially contradicting your previous post saying literally "Read a few of the recent rns."
What I am trying to say is that the SP has been moving up since that RNS (minus an immediate 1-2day drop probably for games...), likely on the assumption that there was now power to keep some lights on.
No RNS to the contrary has been issued, and the news in question implied that the associated power infrastructure in the centre of Ukraine (vs South and East) had not been more damaged to have those lights off.
I have been explicitly saying that there may soon be an RNS saying NO POWER (vs a little power), which might precipitate an immediate drop.
CleverThoughts - no.
Re-read the 1st Nov 2022 RNS:
"repair work has now sufficiently progressed to allow for the partial resumption of production activities at its operations in central Ukraine"
Which means it temporarily went back up, so it can go back down again with the (unfortunately) new waves of missiles hitting Ukrainian ground.
Today's attacks by Putin have unfortunately had an effect in spite of the air defences.
https://news.sky.com/story/russia-launches-massive-missile-attack-on-ukraine-12769133
There will come a point where the energy supply to Ferrexpo will be affected, whether directly or indirectly (if the government decides to redirect more energy to its citizens' immediate needs).
I fear an RNS from the company may drop over the next few trading sessions on that basis.
Yes and no.
1- a very low SP makes it harder for the company to get finance.
2- standard shorting does not necessarily influence the SP anyway, EXCEPT when shorters engage in media manipulation (which none of us can prove though).
3- NAKED shorting, a practice whose legality is questionable, does harm a company's SP.
Knowbodyyouknow - you are interested in comments about the quality, prospects etc. of Asos?
I am bearish too, but I will happily explain the reasons here.
Its business model is thorough challenged for several reasons:
1- returns - it's become a bigger trend for the past 12-18 months and it costs Asos more money. So it's charging for them, but that deters people from buying as happily as they used to.
2- profit sources - I understand that it primarily sells directly to consumers - which is different from Zalando: while its SP has struggled to, it has a series of mixed agreements with manufacturers, incl. ones where it just acts as a "facilitator" (like a marketplace), so its sources of income are more spread out.
3- limited scalability - its primarily UK market. The rest of Europe is already crowded (Zalando again). Compare with Ocado which(for reasons I don't quite understand) seems to be one of the few to have "cracked" fresh food delivery, so it has been able to license / service other food retailers like Lotte in South Korea, so it has such scalability. Asos, by comparison, somehow does not offer a comparatively "special" service.
4- shorter term pressure on disposable income: consumers are gradually more aware that money will not keep flowing - they have spent a lot recently, but their money just does not grow on trees. So it's more likely to go back to the old "death of the middle" in recession where people spend on very basics (Boohoo, or more likely Shein) or pricier products (maybe M&S, but thinking of more luxury (and not online) retailers). Asos is unfortunately "in the middle".
5- pressure on margins - sure, inflation seems to be stabilising, but it's not going away either and the various hedging deals will run out so Asos is unlikely to see profits per transaction to go back up to healthy levels any time soon.
So we can live "in hope", and Asos is well enough run not to go under, but I don't see why the markets will help its SP go back up within the next 6 to 12 months. I'd stand aside until more clarity, even if that means missing that magical "bottom"...
https://www.proactiveinvestors.co.uk/companies/news/999436/marston-s-to-emerge-stronger-from-pub-sector-s-grim-winter-broker-999436.html
It's from the broker so always positively biased. Two interesting things:
- the SP could have tanked in spite of the quasi-profit warning given: it did not and was moderately stable instead.
- this MIGHT have helped flush out traders / investors who had doubts about the company (speculative from my part).
On balance, this note has been useful IMO.
A tiny teeny little bit more of info here:
https://the-blindspot.com/spot-markets-live-transcript-21-11-22/
I'm struggling to assess the credibility of the Betaville-originated rumour, as subsequently reported here 9 days ago:
https://seekingalpha.com/news/3908204-elementis-may-be-seeing-takeover-interest-report
I'm aware of the two successive offer in H1 2021, the last (rejected) one being £160 per share, but I can't assess what would have a(nother) possible purchaser change its mind and go back to the buying booth - the weakened pound?