Member Info for lemonade311

@Couerdelion Thanks for replying with this. Glad to hear that, I will review their presentation today.

If this is the case then Wine should be good & it potentially could be a tailwind for them actually. The key thing is that each of their regions (EU, Australia, US) needs to have locally sourced wine to avoid the tarrifs.

But yeah I'll review later this week but this is my biggest concern gone if they have done

It's not clear that is the case Couredelion, Wine doesn't break down inventory by region. best I can see is looking at the FX currencies they hold as to where the Wine is from.

If wine has a US warehouse with it's EU wine in then I guess that part will avoid the tarrifs for that specific inventory stock.

Management needs to address the tarrifs & their inventory split in more detail first before it's investable imo

I mean you can name call all you want, I'm just stating my opinion.

> "£40m of net cash available from excess stock, primarily in the US"

"£40m of excess inventory" to be liquidated

Wine generated £131m in the US in 2024.

Given their huge inventory issues & the trump tarrifs threat, this will make EU wine worth signficantly less as the market prices that in, you can expect more impariments to happen.

- Panmure has a conflict of interest as it's hired by the company, so their price target is just meaningless.

If tarrifs don't happen, then Wine will be great, if they do happen soon, then Wine looks to be in serious trouble imo, EU producers will dump their wine into other markets like the UK & Australia, Wine's US share of revenue will go down immediately until they can source more wine from non-EU countries maybe.

> This pop isn't backed up by fundamentals

What I meant was, it is backed by some fundamentals, the update is clearly good & better management strategy, however wine oversupply globally is massive and it seems nobody is pricing in tarrifs here

The market is based on supply and demand with a lot of dumb retail investors, we will see what happens when results come.

This pop isn't backed up by fundamentals

This rise doesn't make any sense to me.

Trump tarrifs on EU wine. LSE:WINE has a lot of EU denominated currency on its books which means it probably holds a lot of EU sourced wine, this means they can't offload that wine into the US once tarrifs comes in.

And what do you think happens to wine prices in the EU & the UK when the EU can't sell wine to the US? They will plummet because the EU will have to dump wine into the UK and other markets instead, lowering the price.

The CEO even commented recently how tarrifs are not good for them.

I fail to see why this has risen given this massive risk & oversupply of Wine worldwide, probably will drop when freedom day tarrifs come in.

Again, you clearly don't understand how companies are valued cause you keep referring cake box to Ambala, one was growing, the other wasn't, you can't apply the same ev to EBITDA multiple

Also, just go do some basic research on acquisitions please, the data is overwhelming against this working regardless of whatever synergies you keep thinking will happen

Done commenting here.

Time will tell whether this is good or bad but in the meantime there are many other stocks with better management where I can put my money without the acquisition risk

See's candy was sold to BRK for an EV/EBITDA of around 6: https://sbo.financial/blog/financial-teardowns/sees-candies-a-financial-teardown/#:~:text=Revenue%20was%20%2431.3%20million%20and,for%20Buffett%20at%20the%20time.

They probably weren't going backwards in profit & revenue either.

> Allowing Ambala to remain rudderless for much longer, in order to try and drive down the purchase price, may not be in the bext, long-term interests of CBOX and also give a rival the opportunity to snatch Ambala from under CBOX's nose.

This is a bad excuse to do an acquisition, if a rival wants to overpay and destroy shareholder value then go ahead.

The best acquisitions are done when the acquired company is in bankruptcy court.

I've looked into the data on this extensively and plotted the returns for acquires when they acquire companies using SPGlobal data and it isn't good.

I'll consider looking at this stock again when it's back to sub 120

Why are you comparing CBOX which is growing at healthy CAGR revenue rates & EBITDA rates with a company who's revenue didn't grow & EBITDA fell?

There is no way Ambala would command a 10x EBITDA on the public markets. It's valuation would be in the gutter.

Anyway, we will see. The data is against you & this acquisition working as that link I posted said. 70%-90% of acquisitions fail to deliver value, especially when they are big.

I don't believe they will get £1m in 'synergy'. Management often overestimates it, especially a company who has never done an acquisition before.

The fact is that they are paying 10x EBITDA+ for a company which had no revenue growth & lower EBITDA than last year with no CEO.

If they were public Ambala would be trading at 5x EBITDA max, i.e like Churchill China.

It isn't a good use of capital. Especially when cakebox has 400+ store locations they can open in the UK.

They have overpaid, just like acquiring companies always do. If Ambala had no CEO then there is no rush to acquire Ambala, it would have continued to fall and they should have offered to buy it cheaper.

This is why companies like Colefax have done so well, they refuse to overpay for acquisitions

No, it's 12x underlying EBITDA & without the factory, 10x underlying EBITDA.

And how is it growing rapidly? In last 12 months it didn't grow. It's previous CEO had a 1m+ directors loan for some reason.

Anyway, it's widely researched that big relative acquisitions destroy value: https://blogs.cfainstitute.org/investor/2019/02/28/aswath-damodaran-on-acquisitions-just-say-no/#:~:text=That's%20why%20he%20titled%20his,action%20a%20company%20can%20take.%E2%80%9D

This will be no different. Cakebox is taking on too much leverage. They overpaid.

Absolutely stupid acquisition.

They've overpaid. 12x EV/EBITDA is too much. £22m for 20 shops is ridiculous. The cross-sell & 'synergy' isn't enough to justify the premium at all & they have become significantly levered with it. Another creightons in the making here.

And paying £5m for the manufacturing facility is also stupid. They should be leasing, not buying, they aren't a REIT.

Dumped my £100k+ shares. Extremely frustrating that what looked to be a well run company is throwing $$ down the drain.

I wouldn't pay any attention, guy thinks Audioboom is a good investment lol.

It's a trash company with trash gross margins that is relatively higher in valuation than the vastly superior Acast which actually builds their own ML models: https://www.reddit.com/r/UKInvesting/comments/1fto5ay/podcasting_stocks_acast_audioboom_valuations/

It's hilarious tbh, it's 100% the correct move & removes stamp duty for increased liquidity & less costs.

I will buy more tomorrow probably

@deepjoy No they really couldn't.

The capex investment is already in progress in the new supply facilities. You can't just stop or halt this easily. Also once it's built you have to grow or you waste space and ROIC will suffer.

@Senator1 I don't think it's less profitable. Look at mcdonalds profit margins which runs mostly on franchise fees.

Franchisors tend to have higher profits as it's all royalty I think but obviously less revenue.

Also they don't have leasing costs on these

What does this mean & why would they do this?

A lot of greggs value is in it's future growht still which will be unlocked with more roadside & transport hub shops.

Check steamdb chart numbers. There's been more players for PC1 over the past couple months than PC2.

Embarrassing.

if management has done their ******* jobs and given the devs proper time to update pc2 then this share price would have been £4 by now. can't fix stupid though.

all the while they reward themselves stock options for doing a terrible job.

how do you mess up a sequel like planet coaster though, it's an easy win. there's no innovation you have to do, simply implement what the customers asked for and do it well, they couldn't even implement proper physics that rc1 had, probably cause management was rushing them and it requires engine changes.

@Pears

It's back down again. Stock is still too high for this garbage management. Should never have popped on that RNS