Member Info for MarekQ

@danl90

You comment is spot on the money !!
If the figures in the article are genuine then it is 100% a bet against the FY trading figures.

Still, if I had shorted sub £2 I would be getting twitchy watching it climb to £2.30 and as I mentioned earlier if you omit the 25m shorts, then Dec buyers outnumbered sellers 2:1.

"By last Wednesday, the number of short positions had doubled in just 16 days to 4 per cent of the stock, according to data from research firm IHS Markit for The Mail on Sunday."

So he claims between 13th and 29th Dec the shorts doubled

4% of total shares is approx 49 million.
On 13th Dec SP closed at £1.8020.
On 29th Dec it closed at £2.1920.
An increase of 21% with 25 million shares shorted ??
Seems bizarre, would indicate that if you exclude the shorters, then buyers outnumber sellers 2:1.

I’m sure £2.50-£2.75 is achievable by the trading update on 18th January and after that who knows what it will do.

Hope you enjoyed the write up, just my thoughts on this very very strange share. As always you should do your own research as this is just my opinion on the issues affecting this share.

Happy New Year and Good Luck to all holders.

Well 2021 will be a year Matt Moulding will want to forget, even if December provided some (very) light relief.

DEC Open ; 176.10
DEC Close ; 229.20
DEC Perf ; +29.6%
YTD Perf ; -70.6%

January will be a crucial month for our recovery hopes for the THG share price with a number of important issues to be addressed.

Governance : Still no public announcements on the search for an independent Chairman. Perhaps its proving difficult to find the right candidate or perhaps the ‘going private’ rumours have substance and will negate the need for a new Chairman.

Revenue : Analysts figures predict revenue to be in the range £2.18bn - £2.23bn which would be up c.37% for the full year. These figures have barely changed since the Q3 update so you would expect they are baked inn to the current sp.

EBITDA : Projected to be £174m - £179m a margin of about 8%. The question is how aggressive the accounting was to arrive at this figure, which we likely won’t know till mid April. Basically the market is dubious of the items not used to achieve an attractive EBITDA figure.

https://m.youtube.com/watch?v=BoE8OlnTfg0

Ingenuity : Is this the goose that lays the golden egg ?? THG needs to detail Ingenuity in granular detail to convince the market that it is a gamechanger. Total Clients, New Clients Won, Clients in Pipeline, Recurring Revenues, Estimated Margin for Ingenuity and Projected profitability date for the division. Matalan and Homebase has increased the divisions visibility recently now we need to see transparency in the figures.

Spin Offs : The oft repeated intention of spinning off/selling Beauty and/or Protein needs to be clarified. Solid plans laid out with expected valuation and what will be done with the proceeds I.e. Special Dividend or shares in new entity for existing holders etc etc

Softbank : Personally I don’t see any issue with Softbank not taking up their Ingenuity option, as the name suggests it is just an option, not an obligation. But I can see why MM saying “maybe they will, maybe they wont” is just another uncertainty that the SP could do without.

Cashburn : Is THG likely to need to borrow or dilute equity to raise funds to continue its growth path ?? As the Company is not currently profitable is there a clear path to profitability or is the current growth just zero margin M&A sales.

https://www.fool.co.uk/2021/12/30/the-thg-share-price-has-surged-should-i-buy-now/

Going Private : This one just won’t go away I’m afraid. With MM’s comments in the GQ interview and recent Bloomberg and Times articles confirming the company have discussed it. Appointing the new Chairman or detailing Spin off/sell off plans would help this one fade into the background.

So there are quite a few issues there which all contribute to the uncertainty around THG. I have a large holding (for me) of shares which are about 3% up at the minute, but I had expected them to be a lot further north by yearend. I’m sure £2.50-£2.75 is achie

21st Dec Qube 0.78% down 0.08%

They have reduced by 900k+ shares.
Have the decided its time to cut and run ?
Still got 9m+ to buy back, should help push the SP.

A very odd article indeed. Having read the article I'm left with a "what was the point of that" feeling. They have managed to cover their bases by mentioning both the potential sale of beauty / nutrition and the possibility of a private buyout.

Except in this case perhaps its what is NOT said in the article ;

"A spokesman however said the company “is not considering or exploring a sale of either its beauty or nutrition business”. - So that's shot that one down !

Sources previously said that a decision would be made in the new year if THG’s valuation continued to be depressed. A spokesman said that reports of THG planning to go private were “pure speculation”. - Not exactly shot that one down have they ?

@ Mando,

The Times have been stalking you on the LSE board. Stealing the quotes from your detective work. Lol

50 dma = £ 2.1483 (from investing.com)

From the Bloomberg article ;

"THG is now trading well below its IPO level, and is considering options including selling its prize assets — the beauty and nutrition units that bring in the lion’s share of revenue — according to people familiar with internal discussions, who asked not to be named as the talks are private. THG has also discussed whether to take the company private again, the people added, declining to comment on the record about ongoing plans."

Here we go again, uncertainty, uncertainty and more uncertainty

@ Mando

Yeah, like I said NOT a big deal, just noticed it this morning and wanted to post the link as it might be of some interest to newer board members.

This is NOT a big deal but just wanted to make everyone that the Analyst Consensus figures have been downgraded slightly on the THG website 13th Dec (apologies if already posted but havnt been around for a few days).

https://www.thg.com/analyst-consensus/

Consensus Revenue £ 2,201m down £13m
Consensus EBITDA £ 176.2m down £12.3m

@ste2000

Will be interesting if there are any RNS on Mon/Tues disclosing any increased holdings.

40 million shares on Thurs/Fri represents 3.2% of Co.

No mainstream media running with the "going private" story means without a trading update we are probably rangebound £1.80 - £2.10.

Volumes could change that, more 20m days and this could really move, even without trading update or rumour confirmation.

Good luck all, owning THG is never boring :-)

Many thanks to all contributors for probably the most grown up discussion I think I've ever had on the Internet. Everyone's opinion is welcome.

My summary for what it's worth is that there MAY be something in the Betaville article but I emphasise the article is flagged as "market gossip" which the author defines as "The rumour might be total codswallop, rubbish or nonsense - but then again there may be something in it, so it's worth airing on Betaville."

Usually I would write it off as click-bait but with the authors track record, MMs previous comments and the level of trading Thurs and Friday I'm inclined to give it serious consideration. If Mondays trading volume again tops 20million then I will accept that it's more likely to happen then not.

At the moment I would say it POSSIBLE a buyout may happen, 20 million+ on Monday and I would say its PROBABLE it happens.

With regard to a buyout price I'm inclined to stay with my earlier estimate of £2.80 - £3.30 per share. But I have no great insight, and just arrived at the price using FT figures for avg PE buyout @ SP+42% to max buyout @ SP+70%.

Please do not take anything I've posted as a basis for your future buys or sells as I'm only a (very) amateur using information freely available on the net.

Matthew Moulding 14.98%
Sofina Société Anonyme 9.01%
Balderton Capital (UK) LLP 7.94%
SoftBank Group Corp., Asset Man. 6.6%
Jupiter Fund Management Plc 5.85%
Dominic Murphy 01.19%

Current holdings of MM & Friends = 45.57 %

@danl90

I get what you saying, that every shareholder will have a different idea of what constitutes a fair offer price. RI's who are in at £7.50 will think very differently to RI's who went in at £1.75 as will II's.

But I don't think this idea flys unless the top 25 are on board, that covers everyone down to 0.54% holders (7m shares). So there would be no need to appease these larger holders regarding offer price, as their holding would be unaffected, just now a private company instead of public.

Which just leave the other 21% where you need to consider their buy-in price.

And thanks for taking the time to kick this around as even if there is no substance to the rumour hopefully it will give the SP a badly needed push.

Just had another thought on the maths of the takeover.

Let's assume the top 25 shareholders are on board with going private, that's 79%, so 21% of shares need to be purchased at £3.50, costing £900 million.

Softbanks infamous option allows them to purchase 19.9% of Ingenuity for $1.6billion (£1.2billion)

For £900million they can buy 21% of THG to add to their existing 6.6% which gives them 27.6% of the whole company for £300million less than their option.
So they get a whole lot more for a lot less cash.

@danl90

Agree with your sentiments regarding the offer price needing to be attractive enough to appease minor shareholders and avoid FCA interest but I think PR wise he will be damned anywYwith anything under £5.

The offer price will go nowhere near £5 IMO.

This proposal only works if the top 25 shareholders (79%) are on board and willing to keep their holding in the new private company. Even then at say, £3.50 a share, the take private cost is £900m, assuming all other holders decide to sell out.

Ownership figures are taken today from ;
https://simplywall.st/stocks/gb/retail/lse-thg/thg-shares#ownership

@OhhAhhCantona

Superb analysis

@ste2000

Since the GQ interview I've felt a buyout was always a live option. MM relinquishing his golden share only increased the possibility imo, as the reason for the share was so he could retain control of 'his' company.

No Cyber Week trading update was strange when thanks to Mandos digging it would appear that sales were at 'record' levels. A positive trading update would have giving the share price a boost, not what you want if you are about to make an offer for shares.

The top 25 shareholders in THG own 79% of the shares. MM & Friends offer £×.×× for their shares or the option to retain their holding in the new private company. Retail Investors only own 13.5% of the company, so are largely irrelevant. Retail investors who chose not to accept the offer can hold their now illiquid shares in the new private company and await future IPO(s).

Anyone who bought at IPO or above would get royally shafted, while anyone getting in sub £2 should turn a nice quick profit. Winners and Losers.