Member Info for LetsTry

EC – thanks for sharing. I admire your positivity and can’t help thinking that that a Canvey Island to Newcastle Upon Tyne run with stops at Southend-on-Sea, Clacton-on-sea, Skegness and Grimsby in a stiff North Sea squall will prove an irritable temptation to many warm water cruisers…….

Interesting that you ask that question - I'm not sure what's holding it up.

LONGWAIT – forgive me if I have made a mistake. I’m very happy to be corrected if I'm wrong.

I believe the RI was 25 for 29. For every 25 shares that existed previously there are now 25+29 = 54 so the number of shares in circulation is 1.862 times greater than before.

Assuming mcap is the same and taking BeBold’s pre-RI price of 562p, the RI adjusted price would be 562/1.862. Approximately 302p.

Gregpeck7 – not sure I find your comments or attempts at an explanation particularly helpful or convincing.

If I understand you correctly your position is ignore the past, turn a blind eye to future risks, keep the faith and this time next year Rodney we’ll be millionaires. Well, it's a strategy I suppose.

BeBold – I see no particular need to check but if the SP were 562p on the 14th Feb 2020, that's equivalent to post-RI price today of about 304p.

That’s well below the current SP and close to the 300p level that some of us have been commenting on.

What I think you intended as a defence of the current valuation simply highlights the issue.

The last 12 months have been truly awful for TUI; slashing its income, burdening it with debt it didn’t have, opening it to political interference it was previously free from, little prospect of dividends for the foreseeable future, and the possibility of more fund raising and/or disposal of assets if receipts this year fall below planning assumptions.

And yet you are predicting a SP in the short term which would give TUI a mcap significantly higher than it was prior to the arrival of Covid. Does that not give you pause for thought?

You might be right about it going up, but until someone here or elsewhere can provide me with a convincing explanation for why I'm afraid I'll continue to consider it risky and overpriced.

Avocet123 – I for one am still here.
Well done to aspers and others like him who bought low and sold higher, but for many the rise over the last few days simply reduced the losses following the drop form 400+ when we were being told the only possible way from there was up.

TUI remains a high risk punt, it could turn on a sixpence and I don’t rule out the possibility of sub-300p.

masaimara - and yet as someone who has been predicting a fall rather than rise in SP @hash has been a better predictor of the future than you.

Aspers – I understand the temptation.

You are absolutely right about it being both a game of roulette and defying conventional logic. It doesn’t surprise me that we’re here hovering around 300p but it has surprised me that it has taken so long and things will continue to erratic. But I think level heads will eventually prevail and it will find a value that is a true and accurate reflection of its worth. I’m going to wait. If I’m wrong and miss the boat (no pun intended) then so be it. But good luck to you and others.

Aspers – with a distinct possibility that tui will go well below the 300p.

I have no idea whether it is true or not, but if they are selling/decommissioning ships it points to recognition by tui that even their most recent rescue package hasn’t rescued them, and the need for cash which some of us have been pointing to for some time is indeed upon them.

300p isn't low enough for me. I'd be looking to 250p or better.

Agenice2- who is your “I wouldn't worry too much team. On my analysis, if a holiday is booked for September you will probably get it……..” intended to reassure? Current holders or possible buyers looking for a deeper low?

If you think holidays after September are probably ok, then you seem to be implying that holidays before that won’t be. If the summer season is a blow out for TUI shareholders have a BIG problem. As sure as eggs is eggs TUI will be forced to raise more money and the only way for the SP would be down further.

So why then are you in the same post do you go on to say “Buy now”? You advice is at variance with your analysis.

250% profit on the RI?

To qualify for the RI you had to hold shares first.

For sake of argument someone paying 450p during the run up to it, who took advantage of all their entitlement, would now (with a SP of about 315p) have netted about 8% ! about 1 thirtieth of your 250%.

Yep, and I think the need for more money is a very real possibility.

I think there’s still a lot of risk and TUI is far from out of the woods.

Beetrootjuice – yes, and to emphasise your point, deferred bookings are a double whammy. Not only do they not bring in new money, they still occupy seats on aircraft, hotel rooms etc which in turn reduces TUI’s capacity to service whatever new demand there may be.

I can see no no rational justification for it exceeding the historical valuation prior to the onset of covid. Sub- 300p still likely in my opinion.

Avocet123 – 600 to 800p this year?

And which of the following do you think will be most helpful to TUI as it achieves this doubling of mcap in 24 months? Global pandemic? Collapse of the travel business? Several rounds of emergency funding? Addition of an enormous debt pile? vulnerability to politically motivated government interference? Ongoing and significant uncertainty over this year’s trading? The very real risk of yet more fund raising? Not a sniff of a dividend anytime soon?

@hash - absolutely correct. This is not about the survival of TUI. It's about shareholder value, and that comes down to assets and earnings (profit not turnover). And one thing is for sure, the German government's priority will not be making shareholders rich.

Thank you for making the point so clearly. Alas, there are none so deaf as those who don't want to hear.

I did not give a specific date for a significant drop. I said "...sometime after the 29th....". It might be days or weeks. I can wait.

I will happily admit that I can't explain why the SP going up. It makes no sense to me and that alone is a good reason for me not to invest at this stage. I don’t invest in what I don’t have some understanding of, and can’t rationalise.

The inescapable fact is that this is simply not the TUI of a year ago. It has been badly damaged by events and more bad news may yet come. Any suggestion that the market will sustain a mcap in the short term that is actually higher than a year ago is, in my opinion, implausible. But each of us to our own.

Avocet123 – “….Wake up and smell the coffee. TUI hugely undervalued….”. I couldn’t disagree more.

Just for fun, here’s why I think its overpriced.

Never an exciting growth stock, a year ago before Covid struck TUI were trading at around 600p.

If you and some others here think the current price reflects true value based upon all shares including the new ones created by the RI, then 400p now equates to a pre-RI price of 740p.

You’re choosing to believe that a global pandemic, collapse of the travel business, several rounds of emergency funding, addition of an enormous debt pile, vulnerability to politically motivated government interference, ongoing and significant uncertainty over this year’s trading, the very real risk of yet more fund raising, and not a sniff of a dividend anytime soon have actually increased TUI’s market capitalisation! That’s unorthodox to say the least.

I prefer to believe this catalogue of calamities has been damaging not helpful to the business. Apply your own discount to the pre-Covid price (for sake of argument, say 30%), adjust for dilution from RI…….…..and you get a post-RI SP of 227p.

And that’s why I think a significant drop in the SP sometime after the 29th is looming.

Colti - Matt Han**** seems similarly cautious :

https://www.theguardian.com/politics/2021/jan/18/matt-han****-cautions-against-booking-holidays-abroad-great-british-summer