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The problem with ASOS is that it does not generate any substantial free cash flow. Yes it looks good on sales and EBITDA multiples but what counts is free cash flow.

Momentum seems to be building on East Imperial.......

Why Mobico shares are down today?

Arriva has been purchased for EUR 1.6bln today by private equity firm I Squared Capital. Arriva has annual revenues of EUR 4.2bln. That is a revenue multiple of 0.4x (1.6bln/4.2bln).

Applying a 0.4x multiple to Mobico annual revenues (which are forecast to hit £3.1bln this year) gives you an enterprise value of £1,240m. The company has net debt of £1,169m. So the implied market capitalisation of Mobico is £71m (£1,240m minus £1,169m) which is 12p per share.

Based on this valuation, Mobico shares still have a long way to fall>

Not only does the CEO need to get the share price up to reduce the dilutive effect of the convertible loan but do not forget that he has pledged 75% of his shareholding as security for the loan. So he is all in on this. He needs the share price to rise just as much as everyone else. In fact more so given he has dedicated the last 10 years of his life to building the East Imperial.

The sudden slew of news on RNS and Twitter after the convertible loan was announced were probably deals that had been done some time previously and had been held back because to announce them against the background of an unfunded company would have been largely pointless.

Q4 starts next week. That will be the key quarter of the year for East Imperial. They now have the cash in place for working capital. They have the key distribution agreements in place in the US and China. There is nothing to hold them back.

Given the cash crunch in Q2, the company did pretty well in H1. But all eyes are on Q4 - that is the only thing that counts. Focusing on the H1 performance is like trying to drive a car by looking only in the rear view mirror.

I think the reason for the rise today is that buyers and sellers of East Imperial shares were willing to transact at prices above yesterday's close of 1.95p.

Quick question roger65, if demand for the stock continues to exceed supply over the days to come, do you think the share price will keep rising?

Fantastic analysis roger65! Very enriching. Keep in coming. I guess part of the rise today is also driven by the fact that demand for the stock is great than supply.

Good to see East Imperial partnering with Cutwater Spirits!

Cutwater Spirits is owned by Anheuser-Busch InBev (an international drinks company with annual revenues of over $60 billion). East Imperial looks to be really motoring. Longer term, East Imperial would make a great bolt on acquisition for a giant like Anheuser-Busch InBev - its "Beyond Beer" segment (RTD beverages) is earmarked to be a key growth driver for AB InBev in the decade ahead!

https://twitter.com/East_Imperial/status/1701860271315128683

Correct Goldstinger. The Convertible Loan and the lien it benefits from over the CEO's stake is designed to fully incentivise him to get the share price up. Over 10p and the lien has no force whatsoever.

The Convertible Loan is well structured so as to maximise the incentives for management and shareholders to increase the stock price.

NFT - you clearly have not read the statement properly. The absolute maximum dilution is 44%. But that the is the worse case scenario. The Convertible Loan Notes unveiled today are a clever way of minimizing the dilution. Under the terms of the Loan Notes, the quicker the company and its share price grows the less dilution existing shareholders suffer.

Well said davethechef!

Who needs capital to fund a cash burn rate of £200k a month when you have a great website and Twitter feed? Let's hope we hear nothing about the imminent fund raising for a good 6-9 months. The longer it takes the better for us, right davethechef?

Davethechef and Agricore are right. The longer the delay the more positive for shareholders. Ideally, the delay runs so long that the company runs out of cash and goes into administration!

We are lucky to have guidance on this chat from Davethechef and Agricore. I would not be surprised if they once worked for top international investors like Warren Buffet or George Soros. Thanks guys!

Also davethechef, you were so right to assert at the end of last year that the company has no urgent need for a cash call. Good thing we have you on this messaging board to calm our nerves!

Davethechef, the power and logic of your post below is overwhelming. Yes now that the company has less than £200k of cash and a monthly burn rate of £200k is the perfect time for it to enter a hugely competitive market like the UK.

Not necessarily. Not if the implied dilution is modest via a mezzanine loan as opposed to a pure equity issue.

Clearly EI is unlikely to get a senior secured loan from HSBC or Lloyds at 6pct. Clearly it will have to have rolled up interest as opposed to cash interest. And yes clearly it is likely to have some kind of equity component.

This material uncertainty note is no surprise - the WH Ireland note highlighted this in November 2022. And today results show a cash position inline with the WH Ireland note.

TP have 18.8m shares or 5.6% of the company.

TP is not an investment company. TP acts as a nominee for individual several investors. Some of these individual investors decided to sell hence TP sold shares on their behalf.

The WH Ireland note from November shows they need precisely £2.3m to see them to profitability. Keep in mind they were forced to build up significant inventories because of COVID and these will be turned to cash in the coming months as they are run down. So it may actually need a bit less than £2.3m.

Once again I remind people how quickly businesses in this sector can grow. Below are revenue figures for Fevertree for 2008 to 2018:

2008: £2.4m
2009: £3.7m
2010: £6.7m
2011: £11.8m
2012: £16.3m
2013: £23.3m
2014: £34.7m
2015: £59.3m
2016: £102m
2017: £170m
2018: £237m