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I think some of them will reduce their position size. The short base went up massively into these results based on what appear to be poor trading in recent months. Now that news is out, and the shares have held up, part of their investment case will be impaired.
I suspect they will reduce positions here at the current share price, whilst they are all in profit, and then if it appears trading has worsened some more we will see them rise again.
It tried to warn everyone here. $12m cash burn in H1, and that is with a $4m working capital benefit. This business will be down to 0 cash by December.
Down low teens % I suspect but supported by shorts closing and Mike Ashley buying.
I think this was the toughest comp for yoy sales, so the sales number starts to improve from here.
The cash flow point is the thing that will hurt it today. At least they explained it clearly.
If you like the investment case but are worried about results, then you probably just have too large a position size.
The last trading update was pretty sound. If tomorrow is also ok, that's 2 in a row :)
I think everyone will be staring at the net-debt figure on the trading update. Look at S4's results, it was the rise in that that freaked the market out most.
The bears need a liquidity event to close their positions. If the debt position shrunk a decent size in H2 (as forecast) then the business is solvent, bears won't get their equity raise, will close. The fund managers will see it as investable again, and we are off the the races.
I think numbers have been ready to go for a while. The business warned a week or two ago last year I think. Plus if they were going public yesterday they should have had the numbers well in advance ready for presentations etc.
Most portfolio managers are too cowardly to buy before they can properly see the restructuring coming through, especially in a downturn.
Then like good sheep they will all pile in on the way up.
That is why 95% of fund managers underperformed their benchmark.
So they open a short at 3.92 in mid august. Then close it about a month later a 4.00 in mid September.
...and these are the shorts we should be worried about lol? Makes you wonder what their thesis was that unravelled in such a short period.